|Author (Corporate)||Court of Justice of the European Union|
Judgement regarding the validity of the European Central Bank's programme for the purchase of government bonds on secondary markets (PSPP programme) in light of EU law.
In view of a number of factors that increased the risk of a medium-term decline in prices in the context of an economic crisis entailing a risk of deflation, the European Central Bank (ECB) adopted in March 2015 a programme for the purchase of government bonds on secondary markets - the PSPP programme. Several stakeholders brought constitutional actions before the German Federal Constitutional Court following an understanding that the Decision from the ECB and subsequent extensions go beyond the powers of the institutions. The German Federal Constitutional Court decided to submit questions to the Court of Justice of the European Union (CJEU) concerning the validity of the PSPP programme in light of EU law.
On 11 December 2018, the CJEU finds that consideration of the referred questions disclosed no factor of such a kind as to affect the validity of the PSPP programme. The Court finds that the Quantative Easing (QE) programme does not exceed the ECB's mandate as it falls within the area of monetary policy. It also concludes that the PSPP programme does not infringe the prohibition of monetary financing.
|Subject Categories||Economic and Financial Affairs, Law|
|Subject Tags||Court of Justice of the European Union [CJEU], Monetary Affairs|
|Keywords||CJEU Judgements, Quantitative Easing [QE]
|Countries / Regions||Germany|
|International Organisations||European Union [EU]|