On Tuesday the Federal Constitutional Court ruled that the Lisbon Treaty is fundamentally compatible with the German Constitution – the Grundgesetz or Basic Law. The judgment is vast and verbose (German/English) but here’s a (still quite verbose) summary of it (German/English).

The court sees Lisbon as substantially increasing EU competence, but not to such a point as to extinguish German sovereignty. But because the EU’s structures are not fully democratic – Europe is not a real political society – it’s essential that national democratic institutions play a full part in European decision-making. For that reason, although Lisbon as a whole is okay, some of its provisions – in particular the new simplified procedure for amending the EU Treaties and the “passerelle” clauses by which member states will be able to give up the veto and move to qualified majority voting without specific Treaty amendment – can only be relied on constitutionally if both houses of the German Parliament, Bundestag and Bundesrat, give specific assent to their use.

The judgment is significant in several respects. First, the German Court is making clear that EU law can only be agreed to and operated by Germany to the extent that it is compatible with the Grundgesetz, and that it will be the judge of compatibility. It stresses that in its view this does not conflict with the EU law doctrine of the supremacy of EU law. Second, Lisbon passes that compatibility test – by far the most practically significant aspect of the decision, and something Angela Merkel will be mightily relieved by. Third, it creates a political problem for her and other pro-Lisbon leaders in that German ratification must now be delayed until laws are drafted to guarantee the relevant functions of the Bundestag and Bundesrat; that’s unwelcome, as it eases the pressure on Irish voters and Polish and Czech opponents of Lisbon, but a setback Merkel no doubt gladly accepts as the price for Lisbon’s approval. Here’s a report about political reactions in Germany.

Finally, though, and potentially most significantly, the judgment confirms and further elaborates the legal theory of conditional acceptance of EU law first established by the German Court in its famous Solange I and Solange II judgments, according to which Germany will only accept the supremacy of EU law “so long” as EU law guarantees the fundamental rights laid down in the Grundgesetz; and developed by the Court in its Maastricht judgment, according to which there is a theoretical limit to the EU’s power, defined in terms of its impact on national democratic sovereignty. This 2007 paper by Julio Baquero Cruz gives a good summary of those important earlier judgments: I agree with him that the Maastricht decision established an alternative paradigm of the relationship between the state and the EU which claims higher legitimacy that the EU’s own paradigm of supremacy; this Lisbon decision confirms that paradigm, which could be the foundation of reformist (some would say Eurosceptic) European legal thinking.

The real questions are whether the German Court would ever have the courage actually to rule against EU law on the basis of this theory; and whether EU leaders will believe in its readiness to do, at least sufficiently to be deterred from grabbing too much power. Only time will tell. But the German Constitutional Court is certainly the most powerful institution capable of asserting national power against that of the EU, and I’ve no doubt EU leaders take the risk of its displeasure much more seriously than they do the displeasure of voters in European Parliament elections or indeed in referendums.