Federal Constitutional Court Decision on Bond Purchasing: First Legal Analysis

(deutsche Version hier)

(updated version)

In its decision dating today (Tuesday, 5 May 2020), the German Federal Constitutional Court declares the bond-purchasing programme of the European Central Bank (ECB) contrary to competence.

Sergey Lagodinsky, spokesperson of the Greens/EFA group on legal affairs and Vice-Chair of the European Parliament Committee on Legal Affairs (JURI), comments:

„I welcome the fact that the decision of the Federal Constitutional Court does not call into question the fundamental role of the ECJ.

„On the contrary: The Federal Constitutional Court emphasizes the powers of the European Court of Justice to determine „the interpretation and application of the Union law“ and the „method to be used“ for it. Its role in „interpreting and applying the contracts is a prerogative that should be preserved“.

„The Federal Constitutional Court does not accept that the ECJ failed to interpret and apply the wording of the European treaties according to customary methods of interpretation in the specific case of government bonds. The judgment stands in the light of German constitutional tradition, according to which competence-competencies must be clearly demarkated.

„It is up to the Federal Government, member states and respective institutions, to draw urgent conclusions from the judgment: in the short term, a proportionality calibration with view of effects of the bond purchasing, must be submitted by the ECB. In the medium term, member states must finally aim at treaty changes towards a Europeanization of budget and fiscal policy to secure a legally sound basis for future joint actions.“

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