Bring Back the Politics: The PSPP Ruling in Its Institutional Context

Teresa Violante

doi:10.1017/glj.2020.63

Abstract

AbstractIn this paper, I argue that the conflict between the German Federal Constitutional Court and the Court of Justice of the European Union is the story of a clash foretold, if one takes seriously constitutional courts as institutions designed to be “dogs that bite.” The German Court consistently developed a doctrinal tool to guide its role as guardian of the national constitutional order and the democratic principle, and enforced it when the constitutional control of monetary policy measures so required. I analyze the PSPP ruling, focusing on where the Court concluded that the lack of a satisfactory statement of reasons by the European Central Bank prevented it from reviewing the proportionality of the program. I argue that the Court, after conducting a substantive assessment, applied a weak remedy, thereby deferring the last word on the constitutionality of the PSPP to the political branches. In doing so, the Court opens space for the political assessment of a controversial monetary policy, enhancing the politicization of the Economic and Monetary Union, and provides a doctrinal toolbox for national constitutional courts that face competence creep of EU law in their jurisdictions. I conclude that, ultimately, the main merit of constitutional courts’ interventions in the EU integration is that they are in a privileged position to allow for the politicization of technocratic processes.

Highlights

In this paper, I argue that the conflict between the German Federal Constitutional Court and the Court of Justice of the European Union is the story of a clash foretold, if one takes seriously constitutional courts as institutions designed to be “dogs that bite.”
The German Court consistently developed a doctrinal tool to guide its role as guardian of the national constitutional order and the democratic principle, and enforced it when the constitutional control of monetary policy measures so required
I analyze the Public Sector Purchase Programme (PSPP) ruling, focusing on where the Court concluded that the lack of a satisfactory statement of reasons by the European Central Bank prevented it from reviewing the proportionality of the program

Summary

Preparing to Bite

From a Luxembourg-centered perspective, the FCC has long been qualified as a court that bites. The Court emphasized, in authoritative terms, that the “drops in influence” (Einflussknicke) that lower the level of democratic legitimacy of an independent central bank are constitutionally accepted because there is a recognized scientific consensus that monetary policy should be insulated from competitive politics Such constitutional acceptance is subject to a narrow reading of the ECB’s mandate,[22] limited to price stability.[23] It follows from the preceding analysis of the court’s ultra vires and identity control decisions that such review had to be substantive, i.e that any competent court has to convince itself of the price stability orientation of the program. The FCC26 took issue with this standard of judicial review of ECB’s acts Such a light test was not, in the view of the German Court, an appropriate standard to enforce the principle of conferral, and accused the CJEU of failing to address the consequences of the independence of the ECB for the democratic legitimacy of its actions, a central topic in the order of referral. Whereas the CJEU endorses a procedural approach to accountability that culminates in the exercise of a low review of the ECB’s action, the FCC favors a full review to compensate for the reduction in democratic legitimacy

Applying the Standard

The FCC’s Defiance

The Lack of Statement of Reasons: A Substantive Review and a Weak Remedy

Constitutional Courts Against Competence Creep