|Author (Corporate)||Cardiff EDC|
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).
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.
|Subject Categories||Economic and Financial Affairs, Law|
|Subject Tags||Monetary Affairs|
|Keywords||European Central Bank [ECB], Quantitative Easing [QE]
|Countries / Regions||Germany|