Because of the Karlsruhe ECB judgment EU initiates proceedings against Germany

As of: June 9th, 2021 2:58 p.m.

The EU Commission considers the judgment of the Federal Constitutional Court on bond purchases by the ECB to be a “dangerous precedent”. That is why she is now initiating infringement proceedings against Germany. From Klaus Hempel, ARD legal editors The Brussels Commission believes that the Federal Constitutional Court violated the primacy of EU law with its controversial ruling on the ECB’s bond purchases last year. In doing so, Germany violated the basic principles of EU law. With the initiation of the infringement proceedings, the federal government now has two months to respond to the allegations in writing.

A judgment with explosive political power

In May 2020 the The Federal Constitutional Court ruled that the multi-billion dollar bond purchase program “PSPP” of the ECB was partially unconstitutional . The European Court of Justice (ECJ) had previously ruled that at the request of the Constitutional Court the program is legally in order and there is no violation of EU law . The Karlsruhe judges did not accept this, however, and thus opposed the ECJ – for the first time ever. They called his judgment “objectively arbitrary” and “methodologically no longer justifiable”. Your main criticism of the bond purchase program: The ECB had not justified why the program was proportionate and the significant economic impact on all citizens should be justified. The ECB and, through the ruling, also the ECJ had exceeded competences. The Bundestag and the Federal Government would have to work towards ensuring that the ECB subsequently provides this reason. In June 2020 the Governing Council looked again at the PSPP program and its proportionality. A little later, the Bundestag decided in a resolution that the proportionality test carried out by the Governing Council met the requirements resulting from the judgment. In a decision from the end of April 2021, the Federal Constitutional Court finally found that the Bundestag and the Federal Government had implemented the ruling. For the Federal Constitutional Court, the case was closed. But not for the EU Commission.

EU Commission sees dangerous precedent

The Commission sees a need for further clarification. In their view, the judgment represents “a serious precedent both for the future practice of the court itself and for the constitutional courts of other Member States”. The Brussels authority fears that the German example could set a precedent. The fear: EU states such as Poland or Hungary, which the Commission accuses of violating the rule of law, could no longer follow judgments of the European Court of Justice and refer to Germany. A year ago, shortly after the verdict was announced, had Commission President Ursula von der Leyen made it clear that infringement proceedings could be initiated against Germany . Judgments by the European Court of Justice are binding on all national courts, she explains. “The last word on EU law is always spoken in Luxembourg. Nowhere else.” It is about holding the EU together as a community of values ​​and rights. The reaction of the Polish Prime Minister Mateusz Morawiecki shortly after the ruling from Karlsruhe showed that the fears in Brussels are not entirely unjustified. He spoke of one of the most important judgments in the history of the European Union. The judgment makes it clear that the individual member states determine where the competency limits lie for the EU institutions. In Poland, the national-conservative PiS government has been restructuring the judiciary for years. The ECJ has already intervened several times and found that parts of the reforms violated EU law.

Federal government now on the train

With the initiation of infringement proceedings, the federal government now has two months to take a position. If the Brussels Commission is satisfied with the answer, the procedure would be ended relatively quickly. In the most extreme case, however, the EU Commission could ultimately sue Germany before the European Court of Justice. In this case, the conflict between the ECJ and the Federal Constitutional Court would most likely escalate for good. Shortly after the Karlsruhe ruling, Luxembourg had already expressed its displeasure and officially declared that its rulings would be binding on a national court like the Federal Constitutional Court if it had appealed to the ECJ. Regardless of how the Federal Government will express itself: It cannot impose any requirements on the completely independently acting Federal Constitutional Court, let alone prescribe not to oppose judgments of the ECJ in the future. In previous rulings on Europe, Karlsruhe had always reserved a kind of “emergency brake”, the right to the “last word” in certain cases, as it were. At the moment it cannot be assumed that the Federal Constitutional Court will move away from this line of jurisdiction. The EU Commission is obviously interested in exactly that. She wants to ensure that the court grants the ECJ the final decision-making right with regard to European law issues – with the big, actual goal in mind that other constitutional courts of problem countries such as Poland will then also permanently bow to the ECJ rulings. But how it should succeed in persuading the very self-confident Federal Constitutional Court to give up its previous dogmatics, no one currently has a conclusive answer. As expected, the Constitutional Court did not comment on today’s decision by the EU Commission in Brussels.