BVerfG Judgment regarding ECB’s Public Sector Purchase Programme (PSPP)

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Publication Date 2019-2020
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Judgment released by the Second Senate of the Germany's Federal Constitutional Court (Bundesverfassungsgericht) on 5 May 2020 relating to several complaints directed against the Public Sector Purchase Programme (PSPP) of the European Central Bank (ECB).

Further information:

The Court found that the Federal Government and German Parliament (Bundestag) failed to take steps challenging that the ECB - in its decisions on the adoption and implementation of the PSPP - neither assessed nor substantiated that the measures provided for in these decision satisfy the principle of proportionality.

In its Judgment from December 2018, the Court of Justice of the European Union (CJEU) took a different stance in response to the request for a preliminary ruling from the Federal Constitutional Court. The Federal Court argues that the review undertaken by the CJEU with regard to whether the ECB’s decisions on the PSPP satisfy the principle of proportionality is not comprehensible - to this extent, the judgment was thus rendered ultra vires.

As regards the complainants’ challenge that the PSPP effectively circumvents Art. 123 TFEU, the Federal Constitutional Court did not find a violation of the prohibition of monetary financing of Member State budgets.

The Federal Court also highlighted that this Decision does not concern any financial assistance measures taken by the European Union or the ECB in the context of the COVID-19 (coronavirus) crisis.

The CJEU reacted on 8 May 2020 by restating its exclusive competence to declare if an EU institution violated EU law. The President of the European Commission stated on 10 May that "(...) the final word on EU law is always spoken (...)" by the CJEU.

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Commentary and Analysis
Bloomberg, 31/07/2019: The ‘Collateral Damage’ of ECB’s QE Worries Top German Judges
Reuters, 05/05/2020: German court ruling ties ECB's hands - now and in the future
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Bruegel: Podcast, 05/05/2020: An analysis of the German Constitutional Court’s ruling on the ECB QE programme
Verfassungsblog, 06/05/2020: Some Preliminary Remarks on the PSPP Decision of the German Constitutional Court
European Law Blog, 06/05/2020: The PSPP judgment of the German Constitutional Court: An Abrupt Pause to an Intricate Judicial Tango
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Verfassungsblog, 13/05/2020: Is it a Dance or is it Chicken?
UKCLA: Blog, 14/05/2020: Theodore Konstadinides: The German Constitutional Court’s decision on PSPP: Between mental gymnastics and common sense

Bloomberg, 30/07/2019: German Judges Reopen Old Wounds Over Scope of ECB Powers
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Politico, 06/05/2020: France criticizes German court ruling on European Central Bank
Politico, 06/05/2020: Hogan: Brussels will ensure ‘supremacy’ of EU law after German ruling
EUObserver, 06/05/2020: German court questions bond-buying and EU legal regime
RFI News, 07/05/2020: ECB's Lagarde to seek 'diplomatic path' after German court ruling
Reuters, 07/05/2020: ECB is 'undeterred' by German court ruling against bond buys: Lagarde
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Bloomberg, 09/05/2020: EU Risks Institutional Showdown After German ECB Ruling
Euronews, 10/05/2020: Von der Leyen: 'The final word on EU law is always spoken in Luxembourg'
Reuters, 10/05/2020: EU could open legal case against Germany over ECB bond-purchases ruling: Commission
Politico, 10/05/2020: Von der Leyen considers infringement proceedings after German court ruling
The Guardian, 11/05/2020: Merkel intervenes in damaging row between Germany and Brussels
EUObserver, 12/05/2020: Commission struggles with German court challenge
EurActiv, 13/05/2020: German ECB ruling should ‘spur’ more eurozone integration: Merkel
RFI News, 13/05/2020: Merkel urges euro integration as judges defend shock ECB ruling

German Federal Constitutional Court: Judgment of the Second Senate of 5 May 2020
German Federal Constitutional Court: Press Release, 05/05/2020: ECB decisions on the Public Sector Purchase Programme exceed EU competences
European Central Bank: Press Release, 05/05/2020: ECB takes note of German Federal Constitutional Court ruling and remains fully committed to its mandate
Court of Justice of the European Union: Press Release, 08/05/2020: Press release following the judgment of the German Constitutional Court of 5 May 2020
European Commission: Statement by President Von der Leyen relating to the Decision by the German Constitutional Court, 10 May 2020

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