The ECJ Castigates the Commission for Paying Off Hungary

In an opinion submitted to the European Court of Justice, which tends to follow the legal opinions the 11 Advocates General, Tamara Capeta recommended in February, 2026 to the Court that it “should annul the European Commission’s 2023 decision to disburse €10.2 billion” to the E.U. state of Hungary.[1] Capeta found that the state government had not sufficiently addressed “concerns over systemic corruption and rule of law violations” to qualify for the payment.[2] That the Commission released the payment nonetheless points to corruption at the federal level—in its executive branch in particular—and this charge against the Von der Leyen administration renders the charge against the Hungarian government rather ironic. Rule of law should apply (and be respected!) at both the federal and state levels for the E.U. to continue to be viable. This applies especially to the Commission, as it is tasked with enforcing E.U. laws, directives, and regulations as well as treaty obligations that the EU, including its state governments, have to other countries, whether they are federal unions (e.g., the U.S.) or independent states.  

The Commission’s decision to reverse itself on the payment “came just days before a crucial December 2023 EU summit, where Hungarian Prime Minister Viktor Orbán threatened to veto a €50 billion aid package for Ukraine and block the start of EU accession with Kyiv.”[3] At the European Council’s meeting, “Orbán left the room for a coffee break, allowing the other 26 E.U. [states] to approve the accession talks.”[4] At “an extraordinary” Council session in February 2024, “Hungary lifted its veto on the €50 billion Ukraine support package.”[5] Some representatives in the E.U.’s parliament “suspected the E.U. [had] struck a deal with Hungary, trading unfrozen funds for Orbán’s withdrawal of his veto” even though the Commission “denied any such agreement was made.”[6] Given Orbán’s twice reversal after his state government had just received the suddenly unfrozen funds from the Commission, its denial strains credulity at best, and more realistically actually confirms the charge of sordid dealings in the Commission at the expense of E.U. law.

It is harmful enough to the federal union when a state government violates E.U. law, especially with impunity; for a federal-level governmental institution to shirk federal law says in effect that the E.U. does not respect its own law (so why then should state officials respect it?). Presumably either the Commission and/or one or more of the states could have made a deal with Orbán that did not involve violating E.U. rule-of-law.

Moreover, occasioning the unlawful deal is the staying power of the principle of unanimity in the European Council and the Council of the EU. A minimum of nine states was at the time sufficient for the federal program of “enhanced cooperation” to be invoked, in which case blocs of states could move forward in being subject to a federal law or regulation even though one or more state would still be in opposition but not to be subject to the law. Of course, this program could not apply to votes on whether to annex another state to the Union, and to decisions on whether to spend E.U. funds on other countries, including Ukraine because on such matters, the E.U. itself must either act as one or not act. So a so-called “multiple-speed” E.U. is not a complete answer to the basic problem of applying the principle of unanimity to 27 (and potentially more!) states.

Rather than relying primarily on its state governments for defense and even foreign policy, the E.U. could look to the U.S., which has both a federal military and state armies (called militias). That the federal president can temporarily call upon such armies even if their respective state presidents refuse does not mean that those armies are federal. Such an arrangement, which the E.U. did not have at least as of 2026, is consistent with the underlying dual-sovereignty of both the federal and state governments (or, for the ideologically squeamish, governmental institutions). The augmented federal powers would need to be decided by qualified-majority voting in the Councils that represent the state governments at the federal level; otherwise, no such partial transfer of governmental sovereignty could take place. Being politically unwilling to “step up to the (baseball) plate and bat,” federal and state officials should not collude in deal-making in ways that violate federal laws, lest the Union itself head down a slope wherein federal law has no force. This is especially of value in a world in which military aggressors such as Russia and Israel were wantonly violating international law with impunity; E.U. and U.S. jurisprudence, which is not international, and the corresponding duties at both federal and state levels of government, is not as self-evidently strong as Europeans and Americans may have been assuming in as invasions and genocides elsewhere were going on with impunity internationally.

On a visit to Florida at the time, I was shocked at the extent of brazen refusals by police employees of at least two cities to enforce criminal law—some employees even denying the existence of whole statutes, and the subordinates’ respective managers refused to hold those employees accountable. I was so stunned by the sheer brazenness of the lies that I decided not to move to that U.S. state. The rule of law cannot be assumed as though it castigates sordid personal discretion automatically; rather, law depends on humans to enforce it with integrity. This is why the international “laws” that Putin and Netanyahu were able to violate with such violence for years may not even count as law, for the enforcement-mechanism was entirely lacking de jure et de facto. “Law” without this cannot be counted as law.

The obligation of government officials to recognize and enforce rather than deny the very existence statutory law should be a given. It follows that federal officials in the Commission should not have been permitted to ignore the relevant federal law when it became an obstacle to making political deals with Hungarian state officials. If getting those state officials on board with a political priority of the Commission was so important, then the Commission could alternatively have pressured the states to reduce or end outright the application of the principle of unanimity in the two federal councils that represent state officials directly at the federal level, at least with respect to foreign policy and defense and even on the matter of “enlargement” (i.e., annexing future states). If qualified-majority is too low, then perhaps 75% of the states could be used as a benchmark for such very important policy decisions. The QMV-unanimity distinction is a false dichotomy, given the daylight available between the two voting methods. If one state can hold an entire Union back, then something is wrong with that federal system, and violating federal law to get around that problem is at best a short-sighted, expedient solution. In other words, the E.U.’s federal system has been suffering, at least as of 2026, from a much more serious problem than (collusive) corruption in the Commission and the Hungarian government.

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1. Sandor Zsiros, “E.U. Court Challenges Controversial €10.2bn Payment to Hungary,” Euronews.com, February 12, 2026.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.
6. Ibid.

Immobilizing E.U. Holdings of Russian Assets

By invoking Article 122 of the E.U.’s basic law, a clause that had been used most significantly during the Coronavirus pandemic and in the 2022 energy crisis, the E.U. in December, 2025 finally circumvented the twice-threatened veto by the state of Hungary and indefinitely froze €210 billion of assets of the Russian Central Bank that had been within the E.U.’s territory since Russia began its unprovoked invasion of Ukraine nearly four years earlier. I contend that the European Court of Justice, the E.U.’s supreme court, could apply a rational basis in a judicial review of the triggering of the emergency-conditioned article, especially because the Commission invoked the article in order to obviate Hungary’s threatened veto. Because every E.U. state except for Belgium and Hungary were for freezing the assets until Russia such time as Russia ends its militaristic aggression and compensates Ukraine financially for damages the Belgian and Hungarian state governments were violating the informal norm of consensus in the European Council and the Council of Ministers. Like the U.S. Senate, the European Council, which also represents the states, is like a club of sorts. The problem facing the Commission is that violating a norm is not a legal basis for obviating a threatened state-veto by invoking an emergency clause of the E.U.’s basic law, especially if no emergency actually exists after nearly four years of the invasion. Even though I am personally in favor of the E.U. obviating Hungary’s serial obstructionism that may be, at least in part, retaliation against President Von der Leyen’s Commission for having penalized the Hungarian government financially for having violated E.U. law, legal reasoning should not succumb to the gravity of the “black hole” of personal opinion.  There may be nothing so much like a god as a general on a battlefield, with power over life and death, but neither the European Commission nor myself is a general. In short, the Commission’s legal justification in invoking Article 122 is tenuous at best, even though countering Hungary’s Viktor Orbán’s abuse of his state’s veto-power in the European Council and the Council of Ministers was needed for the E.U. to be able to function within its enumerated competencies (i.e., powers).

The reason for indefinitely holding the Russian central bank’s financial assets that have been in the E.U. since the beginning of the invasion is so the E.U. could use those assets as a basis for making loans to Ukraine to bolster the sovereign state’s military position without the E.U. having to issue its own debt. “We are sending a strong signal to Russia that as long as this brutal war of aggression continues, Russia’s costs will continue to rise,” President Von der Leyen said.[1] The objective was to “make sure that our brave neighbour beomes even stronger on the battlefield and at the negotiating table.”[2] According to Euronews, the E.U. was able to shore up “its mightiest leverage,” push back against “external interference” and insulate “the money from the Kremlin’s war machine—all at once.”[3] The external interference was not really external, as this refers to the financially self-interested objection of the state of Belgium and the pro-Russian objection of Viktor Orbán of Hungary. Obviating self-interested states whose governors are willing to go against the other 25 states in the Council is laudable even though this objective can be traced back to the E.U.’s federal system, which must be taken as a given to the ECJ. To be sure, finding a way to do it by invoking an article of the E.U.’s basic law was not an easy task for the Commission.

“At first, the Commission suggested activating Article 31.2 . . . to switch the [6 months] renewal of sanctions from unanimity to qualified majority.”[4] The sanctions include holding the Russian financial assets. The article is vaguely, and thus problematically from the standpoint of constitutional language, based on “strategic interests and objectives.”[5] This wording could potentially enable the E.U., by qualified majority voting, to encroach excessively on governmental sovereignty retained by the states. That any state government could invoke “vital and stated reasons” of “policy”—again too vague—to veto any such bills that are in the strategic interests and objectives of the E.U. as a whole meant that the governor of Hungary could easily invoke its ties to Russia as vital reasons to veto the proposal to freeze the Russian assets indefinitely.

So, the Commission turned to Article 122, which applies qualified-majority voting rather than unanimity in the European Council (and the Council of Ministers) “in a spirit of solidarity . . . appropriate to the economic situation.”[6] Here too, the constitutional language is too vague. Hungary’s Orbán had been fragrantly violating the spirit of solidarity for years, and “economic situation” is so vague that the article could potentially be used to expunge unanimity from the federal level.

Furthermore, that Article 122 “bypasses the European Parliament” is also problematic because that democratically elected legislative chamber, the “lower house,” could otherwise act as a check on the Commission and the councils exploiting the article to rid the E.U. of the need for unanimity in the councils. Also, requiring a qualified majority vote in the Parliament would not in itself give the state governments the power to use their respective vetoes in the councils. One of the principal benefits of federalism, as distinct from confederalism, is the mechanism of state-federal checks-and-balances. Considering the American history of consolidation at the expense of the governmental sovereignty retained by the states, the vague constitutional language of Article 122 could be exploited. This is not to say that retaining the state-veto mechanism in the councils is at all healthy for the European federal system. Other means, such as requiring a qualified majority in the European Parliament, are consistent with federalism.

Such a check would be of value in terms of the indefinite freezing of Russian financial assets because the Commission interpreted “appropriate to the economic situation” to be invokable due to a “serious economic impact,” including in “supply disruptions, higher uncertainty, increased risk premia, lower investment and consumer spending,” as well as “non-economic drone incursions, sabotage and disinformation.”[7] Again, higher uncertainty and lower investment and consumer spending provide the Commission with virtually a wide-open door to obviate unanimity in the councils.

Earlier in 2025, the Commission had invoked Article 122 “to set up SAFE which allows member states to directly approve a Commission proposal [by qualified majority rather than unanimously] ‘if severe difficulties arise in the supply of certain produces’ or if a member state is ‘seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control’.”[8] Tellingly, it was the Parliament rather than a state government that objected, which is a telling indication that the Parliament should not have been excluded from the procedure to be followed according to the article.

With regard to the “emergency” said by the Commission to justify invoking Article 122 to indefinitely freeze the Russian financial assets in the E.U., the governor of Belgium, Bart De Wever, “questioned the existence of any EU-wide emergency,” as Russia’s invasion was nearing its fourth anniversary.[9] For instance, only 10% of energy in the E.U. was by that time from Russia.[10] Even though the E.U.’s evident economic woes, coupled with the vague wording of Article 122 and its limited jurisprudence, gave the Commission enough leeway to forge ahead,” using even “the economic situation” to invoke the article is highly problematic, especially as the obvious intent was to undercut the state-veto mechanism, which under the E.U.’s basic law at the time, was valid even though Hungary and Belgium were, for self-interested political and financial reasons, respectively, abusing the mechanism given the norm of consensus in the councils.

The upshot is that the E.U. could do better in tightening its constitutional, or basic-law, language, enlarging the coverage of the Parliament (especially as a check on the Commission). In the meantime, the ECJ should take a look at the Commission’s invoking of Article 122, especially on the Commission’s interpretation that “economic situation” really means “economic emergency,” which actually makes sense so to avoid the article from being invoked for virtually anything, and that an emergency was still the case almost four years after the commencement of the Russian invasion, which does not seem to be a valid claim. In the background is the consolidation by the U.S. of power at the expense of that of the member-states, and the related switch from the state governments appointing U.S. senators to them being elected by the citizens of the states. Citizens of a state may not vote so to protect the remaining governmental sovereignty held by their state, whereas senators appointed by state governors and/or legislatures would naturally have an incentive to keep an eye on the federal division of governmental sovereignty. Nevertheless, the veto power of the E.U.’s state governments, especially as there were 27 at the time of the invocation of Article 122 to freeze Russian assets, is arguably excessive and thus harmful to the E.U. level as well as the federal system itself, which should allow for federal oversight “with teeth” on abuses by state governments, especially in infringing on democracy and liberty.

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1. Jorge Liboreiro, “By Locking in Russian Assets for Good, the EU Is Finally Playing Hardball,” Euronews.com, 13 December 2025.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.
6. Ibid.
7. Ibid.
8. Ibid.
9. Ibid.
10. Ibid.

The E.U. on Anti-Trust Enforcement: The Case of Google

On June 19, 2025, when the European Court of Justice, the E.U.’s supreme court, received a nonbinding opinion from the advocate general, Juliane Kokott, recommending that Google’s appeal against an anti-trust fine of €4 billion be dismissed by the court. The E.U.’s executive branch, the Commission, had found in 2018 that the company had “used the dominance of its mobile Android operating system to throttle competition and reduce consumer choice.”[1] I contend that the company’s written statement in response can be characterized as “stone-deaf” or oblivious to the issue at hand. Such is not an effective way of managing threats in the environment of business. Moreover, the response itself illustrates why governmental action on anti-trust on behalf of market competition is valid and necessary. I contend that the invisible-hand mechanism of a restored competitive market is more reliable than depending on managerial intentions even if they are to be based on motivation that is social-engineered from fines.

The fine of €4 billion is part of a total of €8 billion against Google for anti-trust violations over a decade, including on the company’s digital ad unit. So, a pattern of restraint of trade can be inferred. As if obvious to it, the company statement in reaction to Kokott’s recommendation included, “Android has created more choice for everyone and supports thousands of successful businesses in Europe and around the world.”[2] That the advent of android technology had given consumers another option says nothing about whether Google was also curtailing other options. That many businesses were using android technology is not a rebuttal to the government’s claim that Google was operating in restraint of trade. In fact, that many businesses were using Google’s technology means that the company’s market share, and thus market power, were enough for the company to be able to restrain competition in the industry. In wanting to brag (or advertise), the managers at Google who wrote and approved the statement were unwittingly making the government’s case. Unsuccessful companies do not have sufficient market-power to restrict or curtail competition as John D. Rockefeller’s Standard Oil did in the U.S. until that company was broken up (rather badly) by the U.S. Supreme Court on anti-trust grounds. This example begs the question of whether merely slapping Google with fines is sufficient to arrest the company’s pattern of restraining trade. Both the pattern and the bragging illustrate the tone-deaf feature of greed that narrows cognition and perception. In applying a fine to Google, the E.U. regulators would be naïve in believing that the company’s managers would then be motivated to stop curtailing competition. At the very least, the Commission’s commissioner for competition would still need to watch Google like a hawk.

I contend that it is vital to the public interest, or common good, of a society that competitive markets be protected and even created out of oligopolies by governments; this is a legitimate role for government because price-competition forces suppliers to be price-takers rather than price-setters. Only as the former are suppliers oriented to demand. This crucial role of price in a competitive market was arguably Adam Smith’s best contribution, or “value added,” to economic theory. The “invisible hand” by which buyers and sellers are both price-takers can be understood as an impersonal mechanism that constrains self-interest and even gives rise to unintended beneficial consequences of self-interest as goods and services are allocated efficiently rather than according to the self-interested will of a monopolist.

Even more abstractly, self-interest stems from the sin of self-love, which is the putting of one’s own happiness above love directed to God, so constraining especially narrow self-interest is important so as to obviate the baleful effects from greed that is oriented only to one’s own private benefit. In other words, that such self-interest is based ultimately on the sin of self-idolatry (i.e., worshipping one’s own happiness even at the expense of loving God) means that a society is wise at the very least to constrain even self-interests that are economically aggregated with unintended beneficial consequences. Smith’s “invisible hand” impersonal mechanism, if protected by government anti-trust enforcement, is more reliable, I submit, than even intended beneficial consequences that are conditional on human intention and thus motivation. This is why downsizing Google in the E.U. is preferable to trying to motivate Google’s management to stop restraining competition in its industry by means of fines.

Pierre Nicole, a Jansenist priest in the seventeenth century, argued that self-love can have beneficial consequences. The consequences are intended, but only in so far as the benefits going to others are in one’s own self-interest. Courtesy, for example, although rooted in self-love and thus fully in accord with self-interest, constrains immediate or narrow self-interest that runs unfettered in Hobbes’ state of nature. Simply put, we can get more by being social with other people than by taking their food and even killing them. Smith’s impersonal market mechanism also constrains narrow (or immediate) self-interest, such as raw greed, even though the untended aspect of the invisible hand differs from Nicole’s intended courtesy, and the impersonal aspect of Smith’s market mechanism differs from Nicole’s personal motive to extend courtesy to others because it is in one’s interest to do so. Also, whereas the invisible hand constrains self-interest itself, though competition may ultimately be in a company’s long-term best financial interest, extending courtesy to others only constrains narrow (or immediate) self-interest. In other words, narrow self-interest, in which only private benefits to oneself are sought, is constrained by both approaches and so they can be compared. But courtesy can easily be turned off, as it depends on intention, whereas the invisible hand’s operation does not depend on market participants intentions to constrain their own self-interest. As self-love is a manifestation of the foundational sin of pride, according to Augustine, a person’s intentions to constrain one’s own self-interest in actions cannot be relied upon even though it is laudable when a person assumes an enlightened self-interest and even acts altruistically. In assuming a managerial role in a company, a human being comports oneself to one’s narrow economic role, which willows one’s intentions that go beyond immediate or medium-term financial interests, both in terms of salary and company profitability.

It bears remembering that even though part of the literature on corporate social responsibility in the twentieth century includes ethical principles, CSR programs have become largely marketing. Indeed, the fiduciary duty of managers to the stockholders as a group mandates that the managers be oriented to maximizing profit (and thus dividends and the stock price). This legal infrastructure encases narrow self-interest, which benefits from restraining trade in order to increase market power and profit. Therefore, it should not be surprising that Google’s written reaction to the judicial opinion of the advocate general bears no traces of responsibility to uphold a competitive market for the good of society, but can instead be interpreted as sheer marketing. Lots of businesses use our product! Rockefeller could have said the same. That titan, who viewed himself as a “Christ figure” and a Noah in saving rival refiners from destructive competition in the 1860s by forcing them abord his “combination,” was also found guilty of restraint of trade. His self-deluded intentions certainly could not be trusted by the Supreme Court justices who ruled in favor of breaking up his company. In the 2020’s, the E.U. was surpassing the U.S. on anti-trust enforcement, but even so, I submit that motive-triggering fines are not sufficient to restoring and protecting market competition once there is an egocentric giant in the room.

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1. “Google Hits Setback in Bid to Overturn Multibillion EU Antitrust Fine in Android Case,” APnews.com, June 19, 2025.
2. Ibid.

Hungary’s Delusion of Sovereignty

On October 3, 2024, The European Commission, the E.U.’s executive branch, filed a legal complaint against the E.U. state of Hungary with the E.U.’s judicial branch—the high court of which being the European Court of Justice (ECJ). The Commission had won a case against the state and recently subtracted the amount of fine issued by the court from the federal money set to go to the state because the Hungarian government was refusing to recognize the verdict. Like Britain before it had seceded from the Union, Hungary was operating under the incorrect premise that it still enjoyed full sovereignty even though every state delegates some of its governmental sovereignty to the Union in becoming a state thereof. In the case of Hungary, the state law at issue in 2024 had in its very name the fundamental problem out of which the state’s disputes with the E.U. were emanating.

 In its written statement, the Commission describes Hungary’s “contentious act,” which “establishes the so-called Sovereignty Protection Office (SPO) to investigate people and organizations suspected of undermining the country’s ‘national sovereignty’ and ‘constitutional identity.’”[1] Assisted by the state’s secret police, the SPO could legally “collect information on individuals or groups that receive funding from abroad and are perceived to influence the democratic debate and electoral processes ‘in the interest of another state’ or ‘foreign organ,’ meaning a non-state actor.[2] Undue political influence from outside the E.U. state could presumably come from another state in the Union or from outside of it. Treating both the same involves making the dubious claim that for one state or people therein to buy political advertising or contribute to a political campaign in another state is anti-democratic.

Furthermore, that such interstate political influence somehow violates Hungary’s sovereignty ignores the fact that every state in the Union has given up some governmental sovereignty even just for qualified majority voting to be allowed at the federal level in the Parliament, the European Council, and the Council of the European Union. Only if every E.U. law, directive, and regulation required the unanimous consent of the state governments, which could legally ignore rulings by the ECJ would the Union be composed of sovereign states, such as the U.S. was under its initial Articles of Confederation from 1777 to 1789.

The claim of Hungary’s government that its sovereignty is violated by political influence from elsewhere in the Union can be answered by pointing out that the state is no longer in fact sovereign anyway because it is in a Union whose federal system rests on dual-sovereignty. Put another way, the states have consolidated politically to an extent for their common good, which includes being able to have more political weight in the world, so interstate political influence can be viewed as part of that intermingling that is actually a good thing for such a federal system. If states are too heterogenous (i.e., different), then achieving united action at the federal level is very difficult. The combined sovereignties that instantiate federal sovereignty is actually partly Hungary’s, so interstate influence does not necessarily violate Hungary’s sovereignty.

Back in February of 2024, the Commission cited “the principle of democracy, the right to private life, the protection of personal data, freedom of expression, information and association, and the presumption of innocence, among others,” as being violated by the state of Hungary presumably because they threaten the state government’s sovereignty.[3] More accurately, they may have been a threat to Viktor Orbán’s party remaining in power in Hungary. The principles of liberty and democracy that the Commission was arguing that the Hungarian government was violating can be viewed as competencies, or domains of authority, that both federal and state governmental institutions could legally act on. Put another way, the Commission was well within its rights to protect democracy at the state level. In the U.S., the executive branch had acted to protect democracy at the state level, as in enforcing civil rights with regard to the access of Black people to schools and voting. Alabama could hardly say that its sovereignty was being violated because the federal institutions had the authority to enforce democracy in the United States.

The very name of Hungary’s Sovereignty Protection Office is wrong, for the state had delegated some of its sovereignty when it joined the European Union. Just days after the Commission announced that it was taking the state of Hungary to court at the federal level (i.e., at the ECJ), the Hungarian trade minister voted no in a vote taken at the Council of the EU on whether the EU should put tarriffs on Chinese electric vehicles. Had the measure passed the Council, Hungary would have had to recognize the tarriffs as valid within the state. This alone means that Hungary had given up some governmental sovereignty when it acceded to the E.U. as a state.  As it happened, too many votes were abstentions, so there was no final vote either way. So the Commission used its exclusive authority, or competency, in commercial law and policy to enact the tarriffs.  So it is not just qualified majority voting in which the E.U.'s state governments were no longer fully sovereign states. That the E.U. has shared and exclusive competencies, or domains in which it can enact laws and regulations, means that the state governments no longer were fully sovereign. Hungary's "National Sovereignty Law" was thus not only contrary to a basic EU value (and norm), but also a misnomer that gives people the wrong idea concerning Hungary in the E.U. 

To pretend to be sovereign still, such as by ignoring a negative verdict by the ECJ, undermines the sovereignty that Hungary and the other states delegated to the Union, and thus in a way their own sovereignty too because the state governments play a significant role at the federal level not only in the European Council and the Council of the E.U., but also in nominating commissioners for the College in the Commission. In this respect, the state government of Hungary was compromising a part of its sovereignty—that which had been combined with parts of the respective sovereignties of the other states. By making interstate political influence illegal in Hungary, Orbán failed to recognize that the sovereignty at the federal-level has a legitimate interest in there being at least some interstate harmonization, and legally includes protection of the basic values of the Union, such as democracy and liberty. If as I suspect he believed that Hungary was still fully sovereign as a country, then it had no business being a state in the European Union. Britain seceded for this reason—David Cameron, as prime minister, had said that the E.U. was just one of the networks that the UK was in. Similarly, Orbán’s Sovereignty Protection Office explicitly belies or undermines Hungary’s claim to be a state in the Union of states. The Union would be better off without that internal contradiction.

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1. Jorge Liboreiro, “Brussels Takes Hungary to Court over Its Controversial ‘National Sovereignty’ Law,” Euronews.com, October 3, 2024.
2. Ibid.
3. Ibid.

The European Court of Justice Slaps Down Hungary: A Defense of Modern Federalism

The European Court of Justice (ECJ), the E.U.’s supreme court, which like the U.S. counterpart can overrule state courts, ordered the E.U. state of Hungary to pay a lump sum of €200 million and €1 million per day of delay from June 12, 2024 because the state government had disregarded “the principle of sincere cooperation” between states in taking in their fair share of foreign asylum-seekers and “deliberately” evaded implementing the federal law that directs the states how to treat those people who enter the E.U. through the state seeking political asylum.[1] The state government had made it “virtually impossible” for asylum seekers to file applications.[2] Similar to the Nullification Acts passed by the state government of South Carolina in the U.S. when that union was between 30 and 40 years old, the decision of Hungary to ignore the ECJ’s ruling on the matter in 2020 could not be tolerated by federal authorities, for a federal system of dual sovereignty (i.e., some held at the federal level and the rest at the state level) cannot survive if state governments can unilaterally decide to nullify, or ignore federal law. That federal directives in the E.U. reply on implementation into law at the state level just makes the E.U. more vulnerable should a state government so easily dismiss federal law. Why even be in a union if its law is deemed not worthy of respect?

In their written opinion, the justices of the ECJ clearly understood that the problem of Hungary’s dismissiveness of the legitimacy of federal law within the state struck at the foundation of the union. “That conduct constitutes a serious threat to the unity of E.U. law, which has an extraordinarily serious impact both on private interests, particularly the interests of asylum seekers, and on the public interest,” the high court declared.[3] The problem being extraordinary for the E.U. as a federal system of public governance, the public interest being impacted certainly includes that of the union itself. It is necessary therefore to separate out the particular issue, that of political asylum and even immigration, and focus on the viability of the E.U. itself.

Any federal system will not long endure if state governments attempt to throw off problems onto other states. In fact, given the cultural heterogeneity that naturally exists in an empire-scale federation such as the E.U. and U.S., cooperation between the states directly as well as through federal institutions of government plays a vital role. Tensions that might tear such gigantic unions apart need to be offset by cooperation; the last thing such a union needs is political infighting between the states and even just one state that presumes not to be subject to federal law. For such a union to lack enforcement power even in regard to its own competencies (E.U.), or enumerated powers (U.S.) is a sure recipe for collapse and the epitome, moreover, of weakness. So, the ECJ justices acted wisely in automatically taking Hungary’s fine out of its share of largess from the E.U. budget.

For its part, the state government of Hungary could have taken the opportunity to definitely decide whether to accept the validity of E.U. law as applicable even for the state governments, or secede from the union as the British did after they finally came to a decision rejecting the dual-sovereignty, which distinguishes (early) modern federalism from what is now called confederalism. A common expression in English comes to mind: that of, “shit or get off the pot.” Translated, this means, “use the toilette or get up, rather than procrastinate on it all day.” Muddling the difference by staying in the Union and yet mislabeling it as a “bloc” or a “network” rather than a federal system of government, and the European Parliament’s political parties (even the EPP!) as mere “groupings,” as if that legislative body were not a real legislature and political parties could only exist at the state level, only puts the E.U.’s self-understanding at odds with what the Union actually is, and such a lack of self-understanding can never be good for anything (or anyone).[4] A fish would not long live if it comes to believe that it is a frog. A house divided is bad enough; a house that comes to be viewed as a mere tool shed is in even worse shape.

Even though some healthy degree of anti-federalism is a good means of forestalling (i.e., by acting as a check politically and even in the basic or constitutional law itself) the kind of federal consolidation that has occurred in the U.S. since 1865 (i.e., the anti-federalists had been right), knowingly pretending with ill-suited words that a federal union of states is something else altogether whose nature, superimposed, weakens the union by denying what it is empirically is needlessly destructive and utterly dishonest intellectually. Engaging in word-games to obfuscate the public’s understanding of the very nature of the E.U. really only demonstrates the cognitively distortive propensity of ideology (i.e., its susceptibility to delusion from pride and resentment). Journalists and their editors generally have been easy, unthinking tools in that political game of perpetuating an illusion as if it were empirically extant and a fact of reason. What then of the perpetual peace, which old Kant saw as only possible rather than probable if there were a world federation, if a federal system just in Europe cannot even be consistently recognized as federal government rather than as something else entirely that is weaker in providing for public governance?  

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1. Jorge Liboreiro, “ECJ Finds Hungary with €200 Million over ‘Extremely Serious’ Breach of E.U. Asylum Law,” Euronews.com, June 12, 2024 (accessed June 13, 2024).
2. Ibid.
3. Ibid, italics added for emphasis.
4. I am in the midst of translating a 17^th century text from French, and I think the tiresomely long sentences are rubbing off on me. At least I’m not compounding the problem by inserting colons and semicolons throughout such a train of thought. Regarding the EPP, the European People’s Party, which is a political party in the European Parliament, a journalist at the time even parroted (not quoting) a Euroskeptic by dutifully writing, “the European People’s Party group” in an article published online by Euronews. Stating the obvious, I feel the instinctual need nonetheless to point out that “party” is in the very name of the party and thus it is, and understands itself as, a political party. Perhaps “group” should be used to designate the smaller parties at the state level, as more than one of such groups can feed into one of the larger federal parties by means of the elected representatives in the federal parliament—such groups themselves not being recognized there. Such a reversal would doubtless not be tolerated for long! Even so, by engaging in such a reversal, the hypocrisy of the status quo may be better known.

On the Role of the U.S. Supreme Court in Safeguarding the Peaceful Transfer of Power

In the E.U., the state governments and federal institutions can ask the European Court of Justice (the ECJ) for an opinion on a legal matter. This is rare in the U.S., though waiting for a dispute to winds its way formally through district and appellate courts may be unduly bureaucratic, not to mention lengthy. On December 11, 2023, Special Counsel Jack Smith asked the U.S. Supreme Court the ECJ’s counterpart, to decide whether the former U.S. president Donald Trump had any immunity from criminal prosecution of his involvement in the riot at the U.S. Capitol that interrupted the formal counting by a joint session of Congress of the Electoral College presidential ballots. The trial was set to begin the following March, and the question of the former president’s immunity had to be decided before the trial could begin. Hence the “extraordinary request,” which I contend should not be extraordinary given the time frame and the important role of the highest court in safeguarding American democracy from domestic threats.

The prosecutor asked the U.S. Supreme court to review district Judge Tanya Chutkan’s ruling that Donald Trump is not immune from “the election subversion prosecution case.”[1] Trump’s lawyers had argued that Trump’s actions in speaking outside the White House on January 6, 2020 were part of his official duties because he was protecting the American democratic system from alleged vote-fixing by Democrats. Chutkan rejected that argument, pointing out that the speech was oriented to Trump’s re-election and thus was not part of a president’s official duties—efforts to secure another term extend beyond the performance of the office within the current term of office.  Essentially, applying to continue in an office is not a function of the office. Chutkan classified Trump’s speech as falling under the rubric of campaign speeches even though the election had passed because he was using the speech to try be re-elected by Congress (by disputing the authenticity of several state electoral ballots).

To be sure, it was not as if Trump went with the option that he was considering of surrounding the Capitol with tanks—something President Nixon had also considered doing in 1974 during the Watergate scandal, which by the way ended up prompting him to resign. Instead, Trump was trying to throw the election to the Congress by pressuring it to vote on the validity of several of the Electoral College ballots that had been submitted by the state governments to be counted. The U.S. Constitution does give Congress a role in presidential elections, both in certifying the ballots and electing a president outright if no candidate gets a majority of the Electoral College votes. Had there been evidence of significant election fraud that would justify Congressional votes on the Electoral College ballots from several key states such as Arizona, Pennsylvania, and Michigan, then Congress could have intervened while staying within the constitutional framework. It was Trump’s way of applying pressure, by instigating a mob to disrupt the official counting, that resulted in the federal indictments that run just short of insurrection. By the way, I asked a judge on the D.C. district court why he thought Trump had not been indicted on insurrection. “It’s too messy,” he replied. “Isn’t that charge and a conviction based expressly on it necessary for someone to be barred from running for office in the U.S.?” I asked. “No,” the judge replied. “A judge in Colorado is looking at that now,” he added, presumably without there being a trial. It’s a pity that no one asked the U.S. Supreme Court to rule on what a Colorado judge was doing in lieu of a trial on the facts decided by a jury.

Perhaps even more than the presumption of innocence unless convicted of a crime, the rule of law applied even to U.S. presidents is vital to American democracy. Writing to the U.S. Supreme Court, the prosecutors with the special counsel insisted that “nothing could be more vital to our democracy” than holding a former U.S. president accountable for breaking a law.[2] Indeed, a “cornerstone of our constitutional order is that no person is above the law. The force of that principle is at its zenith where, as here, a grand jury has accused a former president of committing federal crimes to subvert the peaceful transfer of power to his lawfully elected successor.”[3] Many democracies have turned into military dictatorships precisely because the peaceful transfer of power was not respected. With a past of rule by kings, both domestic and colonial, many African countries have had trouble with the peaceful transfer of power. As a result, the foreign direct investment of multinational corporations has not been as large as the continent would need to develop economically. Even though it was hard to imagine a military coup in the U.S. in 2023, the precedent of a president getting away with having violated the U.S. Constitution could begin a slippery slope downward. More than sufficient grounds existed in 2023 for the U.S. Supreme Court to fast-track the question of Trump’s immunity.

The question of whether the trial could go forward was subject to time constraints; were the trial date of March, 2024 delayed pending the question of Trump’s immunity from prosecution going through the lengthy appellate process, the question of Trump’s guilt could still be unanswered by the next presidential election, in early November, 2024. Even though several presidential candidates were insisting that they would support a convicted felon for president, presumably voters would want to know whether Trump had committed a crime in attempting to thwart the results of the 2020 presidential election before casting their respective ballots.

Hence, the prosecutors wrote to the U.S. Supreme Court, “Respondent’s appeal of the ruling rejecting his immunity and related claims, however, suspends the trial of the charges against him, scheduled to begin on March 4, 2024. . . . It is of imperative public importance that respondent’s claims of immunity be resolved by this Court and that respondent’s trial proceed as promptly as possible if his claim of immunity is rejected.”[4] The public importance has to do with the electorate having as much information as possible concerning the charges against the presidential candidate before going to the polls that upcoming November.

The fast-tracking would not be without precedent. In US v. Nixon (1974), the U.S. Supreme Court fast-tracked the question of Nixon’s claim of presidential privilege in being immune from a Congressional subpoena for the Oval Office tapes. “In that case, the high court moved quickly to resolve the matter so that one f the Watergate-era cases could proceed swiftly.”[5] It was not long after the ruling that the White House handed over the tapes to a congressional committee, and Nixon’s political fate was doomed from that point. Indeed, the difference between Nixon’s public persona and what he had been saying behind closed doors stunned many Americans who had no idea that even a “law and order” president could have such a squalid criminal mind. The public interest in furnishing the American electorate in 2024 with as much crucial information as possible on one of the presidential candidates can thus be appreciated. It should not be “extraordinary” for the U.S. Supreme Court to see to it that Trump’s federal trial could take place in time for the 2024 presidential election. Winding down the clock, to use a sports analogy, should not be a tactic that any defendant in a criminal trial should be able to use effectively, especially if accountability protecting the peaceful transfer of power is at issue.

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1. Hannah Rabinowitz and Devan Cole, “Special Counsel goes Directly to Supreme Court to Resolve Whether Trump Has Immunity from Prosecution,” CNN.com, December 11, 2023.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.

The E.U. Says No to Hungarian Asylum Detention Camps: A Test for E.U. Federalism

On May 11, 2020, the European Court of Justice (ECJ), the E.U.’s highest court, ruled against the state of Hungary on its detention camp near the Serbian border. The state had denied the asylum requests because the immigrants had come through Serbia, and the latter refused to allow them to reverse course. The immigrants were thus stuck, essentially detained in “prison-like conditions.”[1] The high court ruled that the “conditions prevailing in the Roszke transit zone amount to a deprivation of liberty.”[2] ECJ Advocate General Priit Pikamae had argued that the “unlawful detention” was due to the “high degree of restriction of the freedom of movement.”[3] The state of Hungary had argued that the immigrants could have stayed in Servia, as it was a safe-country of transit, and thus were not eligible for asylum in Hungary. Unlike Hungary, Serbia was not an E.U. state, which may be why the asylum-seekers did not want to remain in Serbia. Hence being a border state added to Hungary’s woes. Therefore, the E.U. had some responsibility to alleviate the pressure on Hungary. Yet the Union did not do so, showing its weakness, and yet the state government bowed to the ECJ’s ruling. To the extent that the E.U. relies on such self-subordination in the want of federal help, the E.U. could be said to be on borrowed time during which basic adjustments to the federal system could be made.

As a border-state of the E.U., Hungary doubtless felt that it could be overwhelmed by asylum-seekers from the Middle East. This set the state’s particular interest at odds with the common interest of the Union because Hungary and other border states would bear the disproportionate weight of the waves of asylum-seekers in the late 2010s. Even though the state’s prime minister, Viktor Orban, was a Euroskeptic, or state rights proponent, and thus especially oriented to his state’s interests, he bowed to the federal court’s ruling, and thus authority. “The Hungarian government disagrees with the ruling, we consider it a risk with regard to European security, but as an EU member state, we will adhere to all court rulings,” Gergely Gulyas, a government spokesman, said at the time.[4]  Even though the E.U. had not come in to solve the intractable problem of the camps, the Euroskeptic state would act according to the ruling of the federal supreme court. This may mean that the E.U.’s federal system had strength at the state level in spite of weakness in united action for the whole—that is, more strength than the Union deserved.

Generally speaking, a federal system is internally vulnerable, and thus weak, to the extent that it must rely on the voluntary subordination of the state governments who must nevertheless suffer from insufficient federal power to redress Union-related state problems. To be sure, a federal system is weak if the states recognize federal authority only when it suits them. Hence the U.S. federal government acted against the state of South Carolina in 1832 after it passed a law invalidating any federal law in the state that goes against the state’s interest. Yet if state governments suffer enough adverse federal judicial decisions without federal help with problems that are acute at the state level (especially if acute because the state is in the federal system), then at some point secessions may result in the dissolution of the federal system.

In the E.U., the federal level was at the time still too hamstrung by overarching state power to be able to act sufficiently even to help particular states on problems stemming from the states’ respective roles or situs in the Union. For example, any state government could veto the proposed law to help the most economically distressed states financially in the midst of the coronavirus pandemic. The power of the states generally is made worse by the strangle-hold that the most powerful states had over the federal level (think Germany and France). Money would not be allocated for the E.U. to deal with the asylum-seekers in Hungary’s detention camps if the most dominant state governments did not agree that the common interest in doing so was worth it to those states. To the extent that the most powerful states could effectively use federal institutions in line those states’ own interests even at the expense of common problems, other states, such as Hungary, would naturally be Euroskeptic. For such a state to recognize an ECJ ruling averse to the state’s interests anyway is surely laudable, even if it buys the Union added time to redress the problem of the imbalance of power between the federal and state levels.

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[1] Deutsche Welle, “Hungary Illegally Held Asylum-Seekers, ECJ Rules,” DW.com, May 14, 2020 (accessed May 22, 2020).

[2] Ibid.

[3] Ibid.

[4] Deutsche Welle, “Hungary to Close Transit Zone Camps for Asylum-Seekers,” DW.com, May 21, 2020 (accessed May 22, 2020).

The European Union at Risk: The German High Court Undercut the European Court of Justice on the Role of the European Central Bank

If a dispute between an E.U. state and the European Central Bank (ECB) on one of its programmes could come to challenge the European Court of Justice (ECJ) itself and the very sustainability of the E.U.’s federal system, then that system itself could be said to be severely impaired, and thus facing a high risk of being destroyed.  Yet in the Judgment of the Second Senate of May 5, 2020, the constitutional court of Germany did exactly that in throwing out an earlier ruling of the E.U.’s supreme court (ECJ) on the legality under E.U. law of an ECB programme.[1]

The primary objective of the  European System of Central Banks, which includes the European Central Bank and those of the States using the euro currency, to be the maintenance of price stability. In 2015, the ESCB “adopted a programme for the purchase of government bonds on secondary markets . . . , with the aim of returning inflation rates to levels below, but close to, 2%.”[2] According to the European Court of Justice, the E.U.’s supreme court within the federal judiciary (CJEU), the ECB’s rationale was that the large-scale purchase of government bonds—90% of which by the state banks—would facilitate “access to the financing that is conducive to boosting economic activity, by promoting a reduction in real interest rates and encouraging commercial banks to provide more credit.”[3] With the supply of goods and services fixed in the short-term, the increased lending by banks due to the lower interest rates would mean more euros relative to the E.U. goods and services, and thus an increase in inflation. However, the ECB’s stated purpose for the program was primarily to boost economic activity by means of lowering interest rates. Yet price stability was the ECB’s objective, hence not to be a byproduct of the pursuit of another objective.

(Source: Trading Economics)

To be sure, the central bank’s mission was an inflation rate to levels below, but close to 2 percent, and the inflation rate in the “euro area” was .24% in 2015, with a period of deflation.[4] By 2019, the inflation rate stood at 1.76 percent, which was within the ECB’s objective. The programme had worked. Whether it should of worked—whether money supply should be increased to increase inflation—is debatable, for deflation and inflation should arguably be determined by relationship of GDP to the money supply. Otherwise, a pro-inflation mandate would mean that prices would continue to increase rather than reflect the market relationship of money and GDP. After a sustained period of inflation, balance would dictate a corrective period of deflation.

Answering questions submitted by the state of Germany’s top court, the European Court of Justice issued a press release in 2018 stating that the “purpose of the PSPP programme is to encourage a return of inflation rates to levels below, but close to, 2% over the medium term.”[5] Yet, as stated above, the ECB’s own stated reason for its programme was to boost economic activity (by decreasing interest rates). The ECJ states that “a monetary policy [i.e., decreasing interest rates to increase inflation] cannot be treated as equivalent to an economic [i.e., fiscal] policy [e.g. for boosting economic activity] for the sole reason that it may have indirect effects that can also be sought in the context of economic policy.”[6] In plain English, increasing or decreasing money supply is not an equivalent option to fiscal policy in boosting economic activity just because this is an indirect effect of the monetary policy. Therefore, even if boosting economic activity were an indirect effect, or byproduct, of the ECB’s primary intent to increase inflation, the ECB could not justify its programme on the basis of its indirect fiscal effect. Yet the ECB’s stated objective of the programme was to boost economic activity! The E.U. should have used a fiscal rather than a monetary policy if the primary aim, as the ECB stated, was to boost economic activity. The groups in Germany that had instigated the German court’s questions to the ECJ had a good argument that the ECB had been acting beyond its mandate in this narrow sense. However, that the ECB had achieved its inflation target by means of the programme suggests that the central bank could be viewed as having acted within its mandate. The question is perhaps whether the ECB pursued its program even after the inflation target had been achieved. That the rate in 2018 was still below 2% suggests that this was not the case. The problem, therefore, was that the ECB stated boosting economic activity as its primary objective, with lower interest rates serving only as a means.

Unfortunately, the constitutional court of the state of Germany took its objection too far. Even though groups that had brought constitutional objections to the Bundesverfassungsgericht (the German constitutional court) had claimed that because the PSPP programme exceeded the ECB’s mandate, the E.U. failed “to observe the division of competencies” between the E.U. and its states, the German court violated the supremacy of the ECJ, the federal supreme court of the E.U., over the state courts by directing the state’s central bank not to comply with the ECB’s programme by buying back German bonds. Such a long sentence, by the way, is in keeping with German, though my words do not reach such a length.

The Nullification Crisis in U.S. history can provide us with a context. In November, 1832, the South Carolina Government passed a law declaring the U.S. tariffs laws of 1828 and 1832 null and void in South Carolina. The underlying problem was “the constitutional theory that upheld the right of states to nullify federal acts within their boundaries.”[7] Had the member states still been sovereign, as they had been from 1776 to 1789 (including under the Articles of Confederation), the doctrine would have had a solid basis (i.e., the full sovereignty of the new republics within the U.S.). However, once the U.S. itself (i.e., the federal level) had been delegated some governmental sovereignty, the doctrine would have eviscerated that sovereignty. States would have been able to pick which federal law to recognize, hence any federal law could easily have been vitiated or compromised. The states would have been able to trample on the federal sovereignty with impunity and the federal system itself would have lost coherence, and thus the ability to function viably.

On May 5, 2020, the constitutional court of the state of Germany ruled against the legality of the ECB’s programme within the state, much as South Carolina’s legislature had voted against the legality of the tariff laws. It was a direct challenge to the E.U.’s central bank and supreme court (ECJ). Were the ECJ to let the state court’s ruling stand, other states would surely follow in opting out of whatever federal laws they do not like. The Government of Germany had been against the bond buy-backs in the euro area because of the shared losses. In short, the powerful northern state didn’t want to pay for the losses of poorer southern states through the programme. Likewise, the matter of shared state debt had been a hot topic during the Washington administration in the 1790s in the United States. There too, the state governments who had incurred less debt in fighting the Revolutionary War did not want the higher debts of other states to be pooled through the federal government.

The resistance in Germany since the European debt crisis during and after the financial crisis of 2008 to covering the massive debts of Greece, Spain, and Italy found a footing in the German court even though the ruling meant the possible vitiation (i.e. end) of the E.U’s competencies (i.e., governmental sovereignty), and thus of the federal system itself.  “Given the influence Germany wields as the largest [State in the euro area of the E.U.], the [ECB] can’t afford to ignore the [German] court’s decision, in part because it would be all but impossible for” the programme to continue without the participation of Germany’s central bank.[8] Moreover, other state governments (and courts), such as in Poland and the Czech Republic, would likely follow in challenging the E.U. unilaterally.

The German chancellorin (prime minister), Angela Merkel, had been urging a stronger E.U. after the secession of euro-skeptic (anti-federalist) Britain, yet her state’s interest in staving off shared debt through the ECB resulted in her state’s high court throwing an arrow directly at the core of the E.U.’s federal system (of dual or divided sovereignty). “At a time of growing tension in the EU over German reluctance to embrace ambitious plans to resuscitate southern European economies hit hardest by the coronavirus by issuing mutualized debt, known colloquially as corona bonds,” the German court’s ruling added fuel to the argument that the E.U. itself was being compromised by the power of its largest state in pursuing its own interests at the expense of the common good, or general welfare, in the Union as a whole.[9] Abstractly stated, no part should have sufficient power over the whole that the latter’s power is eviscerated because it is a mere reflection of  the interests of the part operating at the expense of the whole.

(Source: Politico)

As for the ruling of the Bundesverfassungsgericht (the German constitutional court), Justice Andreas Vosskuhle said that the ECJ had approved the programme that “was obviously not covered” by the ECB’s mandate.”[10] The ruling did not apply to the corona bonds during the pandemic in 2020. Nor was the ECB’s purchasing of state debt (i.e. quantitative easing) during the financial crisis. Even though the court did not find enough evidence to rule that the programme amounted to monetary financing (i.e., the ECB funding state budgets), the court did decide that the ECB had overstepped its inflation-objective mission.[11] The German government had been against pooling money through the ECB to fund the government budgets by pooling the debt of the more indebted states going back to the financial crisis of 2008. Regarding the programme at issue here, the German court’s claim that the ECB had overstepped its mandate does not succeed because the programme did not push inflation above 2% in trying to boost economic activity. In other words, the ECB had not over-shot its inflation target, even if the bank erroneously was primarily oriented to increase GNP. Inflation was so low in 2015 that an inflation rationale was justified. 

 

The impact of the Bundesverfassungsgericht’s ruling went beyond the ECB itself. The viability of the ECJ and the federal system itself was suddenly under threat. Dismissing a 2018 ECJ decision to allow bond buy-backs, the state court “ordered the ECB to provide Germany with adequate justification for the program within the next three months. Should it fail to do so, the Bundesbank [the state’s central bank] would no longer be permitted to participate in the program.”[12] The ECB was at the time “an independent EU institution [that] does not have to take orders from the German court, and the government in Berlin.”[13] In reply, the ECB told the German court that the ECJ had already determined the legality of [the programme]. In dismissing the ECJ’s earlier conclusions, the German court, by a 7-1 majority, declared the reasoning by the ECJ to be “not comprehensible” and “objectively arbitrary” and the decision itself to be untra vires (i.e., beyond the court’s authority).[14] Yet the German court presumed itself to have the authority to overrule the federal supreme court!

Even were the ECJ to deliver a bad ruling, or one injurious to a particular state’s policy, the ECJ would be protected by the precedent of its superiority over state supreme courts. The ECJ had ruled in Costa v ENEL (1964) that the states had transferred sovereign rights to the ECJ on E.U. law and furthermore that such law could not be overridden by state law. The ECB being a federal institution, the matter of whether the programme breached the central bank’s mandate was within the purview of the federal supreme court, the ECJ, rather than any state court. In stating that the gravity of the question at hand merited going up against the ECJ ruling and the ECJ itself, the German court had, I contend, lost perspective. Buying back bonds through a federal program, unlike something infringing on basic human rights, for example, does not have sufficient weight to justify imperiling the federal system itself. It is ironic that just months after the state of Britain seceded in part out of dislike for the extant governmental sovereignty of the E.U. in relation to that of the state governments, the German state court threw a bomb from within.

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1. BVerfG, Judgment of the Second Senate of 05 May 2020 – 2 BvR 859/15-, paras. (1-237).

2. Court of Justice of the European Union, Press Release No 192/18, December 11, 2018.

3. Ibid.

4. Statistica.com (accessed May 10, 2020).

5. Court of Justice of the European Union, Press Release No 192/18.

6. Ibid.

7.  The Nullification Crisis, Britannica.com (accessed May 10, 2020).

8. Matthew Karnitschnig, “German Court Lays Down Law in Defiance of European Union,” Politico, May 5, 2020 (accessed May 10, 2020).

9. Ibid.

10. Ibid.

11. Ibid.

12. Ibid.

13. Ibid.

14. Ibid.

Can an American Member-State Exit the Union?

A war was fought over it. In early 2013, the White House made it explicit in replying to a petition. Yet still there was a sense among at least some Texans that something was amiss. Following U.S. President Obama’s re-election in 2012, citizens of Texas, Louisiana, Alabama, and five other member-states in the U.S. signed petitions for the White House to allow their respective states to secede from the Union. At the time, few people other than the secessionists themselves took the petitions seriously. Yet the underlying contending principles deserve more serious reflection even if no "exit" is anticipated. Most importantly, the matter concerns how and whether the rights of member-states (and majorities of the people, therein) are to be circumscribed in a federal union that leaves said republics semi-sovereign and with residual sovereignty.

In his reply to the petitions, Jon Carson, director of the White House Office of Public Engagement at the time, argued that the American Founders did not provide a right for states to “walk away” from the Union because it is perpetual. He cited Texas v. White, a U.S. Supreme Court case in 1869 that ruled that individual states do not have a right to secede. The republics constituting the polities within the Union have residual sovereignty yet not the most basic authority, or right, to secede. As a republic is a polity whose political system is that of representative democracy, the right denied would be that of the majority of the people. Hence, Texas v. White can be interpreted as infringing on democratic principles. 

For his part, the communications director for the Texas Nationalist Movement, Jeff Sadighi, pointed to the section of the Texas constitution that asserts Texans have the right “to alter, reform or abolish their government in such a manner as they may think expedient.”[1] To alter or reform the government of Texas refers to the governmental system there presumably by constitutional amendment. Although it is possible that an amendment could allow for a "Texit" from the U.S., typically amendments pertain to a government itself as a political system rather than to relationships with other political entities, even if governmental sovereignty is split. To abolish a standing government is to do just that. Since to avoid a brutish state-of-nature some governance is required, presumably the constitution also gives a right to create a new government. The question here is whether such a government would be bound to the U.S. even if secessionability were part of a new government of Texas.

For an answer, we must locate the term "perpetual union" at the federal level, for the Texas v. White decision relies on the federal insistence that the Union is perpetual--meaning that it cannot be abolished and that member-states cannot secede, or "exit" as per twenty-first century parlance. In 1777, The Articles of Confederation and Perpetual Union were proposed to the 13 sovereign member-states. Ratification concluded in 1781. The treat did not establish a federal government; there was only the Continental Congress wherein delegates from the republics met. Article XIII states that "the Union shall be perpetual." In Texas v. White, the U.S. Supreme Court took this to mean that a member-state could not leave the union. I submit that this inference is fallacious. For the Union itself to be perpetual does not require that no member-state leave the Union; it would not be abolished were a state to "exit." Even had the member-states in the Confederate States of America had succeeded in exiting in the 1860s, the U.S.A. could have continued to exist, minus those states. In short, perpetual does not imply that something remains as it is; rather, perpetual means that the thing itself cannot be abolished.

The most blatant error in Texas v. White is that the Court assumed that The Articles of Confederation were still valid. In 1789, that treaty was replaced by the U.S. Constitution, and no reference to perpetual is in that ongoing document! 

In contrast, the argument against the Texas v. White decision rests on constitutional language. In particular, the 10^th Amendment explicitly refers to the residual (i.e., unspecified, and thus unlimited) powers being held by the states and the people, rather than to the federal government, which includes the U.S. Supreme Court, the Congress, and the U.S .President. The "people" refers both to roles as citizens of the respective states and U.S. citizens. The former implies that the majority of a state's electorate have just as much residual sovereignty as does a majority of the U.S. electorate; the notion of popular sovereignty as the ground of a representative democracy gives a majority foundational authority. So it makes sense that residual sovereignty ultimately belongs to majorities of electorates. In federalism, each citizen is one of two polities--her member-state and her federal government. That the amendment assigns residual sovereignty to the states along with the people implies that the latter have residual sovereignty especially in so far as a person is a citizen of a state. Moreover, the residual sovereignty of a member-state and the people more than outweigh the limited, or enumerated, authority of the U.S. Government, and especially the historical treaty that since 1789 has not been in effect.

The U.S. Supreme Court, a branch of the federal government, reached its Texas v. White decision in spite of the fact that it is so obviously without an ongoing constitutional basis; the Court went instead merely on the stretched assumption that what had been stated in the Articles is somehow to be implied in the U.S. Constitution, which replaced the Articles. The explanation may lie in the Court being caught in an institutional conflict of interest. In short, the head of a branch (or arm, as per The New York Times' terminology on the E.U., which in turn seeks to distinguish itself from the U.S. in part by having arms rather than branches) has an institutional interest in protecting the government or level of government that has the branch or arm over being a level (i.e., unbiased, and thus fair) adjudicator of constitutional conflicts between a member-state (or even the member-states) and the government in which the Court is a part. Americans, and even the world, miss this conflict of interest whose support is in the U.S. Constitution.

It may be that the E.U.'s constitutional language allowing states to secede reflects a more balanced federal system with respect to the states and the Union. In fact, the E.U.'s Supreme Court, the ECJ, has cleverly evaded the conflict of interest that plagues its counterpart in the U.S. by having a given state nominate a state jurist to be confirmed by all of the states. With such a state-based process, the inherent bias of the European Court of Justice toward the E.U. level is institutionally (here, in terms of process) countered such that the state and federal levels have weight. That the U.S. has not learned this point from looking at the ECJ is troubling, as this implies that the U.S. Constitution may not be flexible enough even to be improved.

For more on such conflicts of interest, see Institutional Conflicts of Interest, available at Amazon. For more comparisons of the E.U. and U.S., see Essays on Two Federal Empires, also available at Amazon.

1. Manny Fernandez, “White House Rejects Petitions to Secede, but Texans Fight On,” The New York Times, January 16, 2013.