In the middle of the summer, the Constitutional Court published its decision in case U-I-129/19. In it, it precedingly judged the constitutionality and legality of several parts of the Supplementary Budget from 2019, the Implementation of the Republic of Slovenia’s Budget Act for the years 2018 and 2019, and the Ordinance on the framework for the preparation of the general government budget for the 2018–2020 period. It ruled that neither the Supplementary Budget, nor the Act were unconstitutional, and rejected the request for an assessment of the legality of the Supplementary Budget and the Decree. Since the decision as a whole is distinctly constitutionally problematic, it deserves the attention of the professional and the general public, which has so far, probably because it is still summer, not been given to it yet.
Initially, professional ethics require me to disclose the conflict of interest. Due to my expert belief in the unconstitutionality and illegality of the conduct of the government and parliament in relation to the relevant acts, I participated in the preparation of the relevant request for the review of constitutionality and legality. The request was filed in April or May of 2019, and the Constitutional Court, with the matter being that of the absolute priority, of course, decided on it for more than a year, until July 1st, 2020. That means that the relevant acts have already expired, and the Constitutional Court could therefore had avoided the hot topic entirely and dismissed the matter altogether.
However, it did not dare to do so, as it correctly concluded that, due to the periodicity of the drafting of the budget documents, there would practically never be enough time for a constitutional review. The Constitutional Court therefore took the petitioner’s request into consideration, regarding the alleged unconstitutionality of the adopted acts, claiming that it raises important constitutional issues, but not regarding the legality of these same acts. In this part, the request is not supposed to raise important constitutional issues (which, by the way, the Constitutional Court does not explain at all).
An unconstitutional manoeuvre followed
But! This manoeuvre, and some others, as we will see below, was crucial for the Constitutional Court to achieve the set result, which, upon reading the decision, seems to have been the only option from the very beginning. The impugned acts had to be defended constitutionally! The Constitutional Court succeeds in doing this by combining two steps.
Firstly. Article 148 of the Constitution stipulates that revenues and expenditures of the state budgets must be balanced in the medium term. The manner and time frame of the implementation of the fiscal rule is regulated in more detail by a law that the legislator must adopt with a constitutional majority. In the opinion of the Constitutional Court, this law, although it has an explicit constitutional authority in Article 148 of the Constitution, does not regulate the constitutional matter, so it does not fill in the constitutional principle, but is just an ordinary law which, like all other laws, notwithstanding a special constitutionally prescribed majority, it merely implements the constitutional text. With this, the Constitutional Court legally and factually empties the content of Article 148 of the Constitution. As Article 148 does not (anymore) contain the constitutional criteria of the Golden Fiscal Rule, due to this decision of the Constitutional Court, it was clear that neither the Supplementary Budget nor the Act could be declared unconstitutional. As Article 148 of the Constitution is now empty and the Constitutional Court knows this, it writes in an apology and consolation for the naïve, saying that “the path to the unconstitutionality of the budget is not easy. However, this does not mean that it is excluded.” It is not formally excluded because it should not be, but in fact, it does not exist because the very constitutional criteria, on the basis of which unconstitutionality could be objectively established, no longer exist. It was with this decision that the Constitutional Court excluded them.
Secondly, after the constitutional principle from Article 148 was emptied, the only thing left to do, was to evade the legal framework. This is where it gets complicated, because even if we take the position that a law, prescribed by the Constitution, which must be adopted by a constitutional majority, cannot be considered as a mechanism that fills the content of the constitutional principle, there is still the fact that the law remains law, and all other hierarchically lower legal acts must follow it. So if the Supplementary Budget and the Decree have passed the test of constitutionality, the Constitutional Court should have then assessed their illegality. The Constitutional Court got rid of this step with a double manoeuvre. First, as already mentioned, it rejected the request for an assessment of the illegality of the acts that have already expired, saying that this does not raise important constitutional issues. The case is extremely problematic because the two acts have ceased to be valid because, in spite of the absolute priority, the Constitutional Court has been (not) deciding on them for so long. If, in this case, the Constitutional Court was to decide, as is appropriate, by the end of 2019, it would also have to review the legality, at least of the Decree, which would certainly not survive that review.
Nor would the Supplementary Budget. Aware of this, the Constitutional Court used another manoeuvre. The budget (in this case, the Supplement) was proclaimed as an act, having the force of law and the hierarchical position of the law. Therefore, since it is on the same level as the Fiscal Rule Act and the Constitutional Court is not competent to decide on the mutual harmonization of laws, the request must also be rejected in this part. And the Supplementary Budget was once again saved!
A decision on the verge of arbitrariness, and contrary to the Constitutional Court practice so far
Everything would have been as it should be if these manoeuvres were legally convincing. However, the opposite is true; it is on the verge of arbitrariness. In order to achieve its set goal, the Constitutional Court uses its past case law very selectively and acts in complete contradiction with the views of the Slovenian constitutional law profession. This, perhaps by mistake, is even quoted, in the footnote 39, from which it is clear that the Slovenian profession emphasizes that the budget “is not a law,” or that “neither according to the formal, nor according to the material criterion […] could it be classified as a law.” However, the Constitutional Court did this anyway. In doing so, it relied on its decision in the case U-I-428/02, where it added in parentheses (!), that the budget is as strong as the law. It does not use its case U-I-40/96, which it cites, but keeps completely quiet about it in the part where it is explicitly written in point 11, and in no way in parentheses, that: “The budget cannot derogate from legal provisions. If the budget law contained such provisions, it would go beyond the constitutionally outlined content in this part and would be unconstitutional.” Since the Supplementary Budget in this case explicitly derogates from the Fiscal Rule Act, it is, of course, unconstitutional, following the case U-I-40/96.
However, if, as the Constitutional Court did, we take the position that the budget is a law, then the Fiscal Rule Act becomes completely irrelevant. The Fiscal Rule Act determines exactly how much and how the state should spend most of its budget, with a mathematical formula, but the legislator can now completely circumvent this with each new budget, constitutionally and legally, according to the principle of lex posterior derogat legi priori.
In short. If the Constitutional Court had not substantively emptied Article 148 of the Constitution; if the Constitutional Court had not taken too long to rule on the request; if the Constitutional Court had not declared the budget law, despite its own different case law and the harmonized position of the constitutional law profession; the golden fiscal rule would still actually exist in Slovenia today, and not just on paper. But it does not. As this column has shown, there are even fewer convincing constitutional reasons for the result I presented. We are left with only a rhetorical question: what is happening with our Constitutional Court?!