Karlsruhe Not Only Barks, But Finally Bites—Some Remarks on the OMT Decision of the German Constitutional Court

Abstract

On 6 September 2012, the European Central Bank (ECB) published a press release on “Technical features of Outright Monetary Transactions.” In this press release, the ECB announced that it would purchase bonds of Member States participating in the European Financial Stability Facility (EFSF)/European Stability Mechanism (ESM) program on the secondary sovereign bond markets under certain conditions. Furthermore, it gave notice that there were no ex ante quantitative limits on the size of these outright monetary transactions (OMT). This OMT announcement of the ECB was challenged before the German Constitutional Court. In a 6:2 decision, the Court raised doubts with regards to the compatibility of the actions announced in the OMT press release with the rules governing the mandate of the ECB in the Treaty for the Functioning of the European Union (TFEU), and referred the case to the European Court of Justice (ECJ) for a preliminary ruling.