Pretty much coming down to the freedom to choose any of thirty different kinds of snack crackers in the supermarket.

Three million in prison, another million under house arrest… eventually, those numbers start to add up and make people wonder what “freedom” actually means to Americans.

If I remember the German media reports right, the court (in the last case) said something like “this law violates the privacy rights of millions of innocent citizens. It might also help catch a few criminals. The rights of the many outweight for now the possibility of catching a few criminals. So “unconstitutional pending further review”.

Expectation here in Germany is that they will declare at least parts of the law unconstitutional. They don´t use injunction lightly and it´s almost always a hint how the court will decide in the end.

Point is, if I recall the German media correctly, the German Federal Constitutional Court – in the last few months – got seriously alarmed by all this data-grabbing, search anything even without evidence, share date with everyone government approach.

I maybe should also mention that the German Federal Constitutional Court is pretty highly regarded in Germany. Only a stupid politician would even think of attacking them.

So, in case of a real difference between a EU court and the German Constitutional Court, German public opinion would side with the German Constitutional Court. Even if German politicians sided with the EU court.

Best course for the ECJ would be to say that the watchlist in its current form is wrong. Violating basic rights like the rule of law.

You certainly can have a watchlist. But you have to provide evidence. If sensitive, you can provide them to a closed court hearing (Is that the right term? Not a public hearing?). But there should be a way to challenge your inclusion to a watchlist. And that challenge shouldn´t depend on diplomatic moves.

They already trimmed down 2 German security laws proposed by the German Federal interior ministry and are currently considering a third.

Germany’s New Right to Online Privacy.
The German Constitutional Court ruled Wednesday that a surveillance law passed in 2007 in the state of North Rhine-Westphalia gave police and state officials too much power to spy on citizens using “trojan horse” software, which can be delivered by e-mail and used to scan the contents of a hard drive.

Not only did the law violate the right to privacy, the court said, but it also violated a basic right for a citizen using a computer with an Internet connection to “a guarantee of confidentiality and integrity in information-technology systems.”

This was the full name of the latest civil right, which court president Hans-Jürgen Papier admitted was unprecedented in German law. He also named a few exceptions: In cases of a concrete threat to “life and limb or personal liberty,” or the existence of state institutions—a loophole for terrorism investigations—authorities can apply for a warrant to snoop a hard drive.

The Hallmarks of a Totalitarian State.
Germany’s Federal Constitutional Court declared Tuesday that laws allowing police to indiscriminately scan license plates using electronic surveillance devices and match them against databases kept by law enforcement and state officials were unconstitutional—at least if strict provisions weren’t placed on the practice.

Constitutional Court Unplugs Data Law
The law gave the federal government broad access to stored telephone and Internet data—including e-mail addresses, length of call and numbers dialled—for a six-month period. In the case of cell phone calls, service providers could potentially save data on the location calls were made from.

The law went into effect in January. But on Wednesday the German Constitutional Court in Karlsruhe issued an injunction against it, declaring parts of the law unconstitutional pending further review.

All three cases have in common that they went against “unlimited” government power. “Unlimited” as far as a democracy allows.
Simply put you need evidence and (checks and balances) a judge/court agreeing. I suspect they would at least like a possibility to challenge being on that watchlist in a court.
From your Papier quote:
“What is interesting is that the person who comes to be on such a list is neither told in advance, nor told the reasons why they will be on the list. The underlying evidence isn’t provided, and there is no effective legal protection.”

The OFAC list that the WaPo refers to, unlike the others, is public: http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf

If you are “Charles R. Bright” you need to explain that you are not the former Liberian finance minister. If your birthday happens to be 29 Aug. 1948 as well, you’re screwed.

Especially if they mostly just use that rhetorical trick where you first mention an objection, and then proceed as if it has been dealt with by restating the original point.