Abstract
Right in the middle of the Covid-19 pandemic, the German federal constitutional court (Bundesverfassungsgericht – FCC) issued a ruling that sent massive shockwaves through the continent. Not only did the Court question the legality of the European Central Bank’s bond buying program PSPP (Public Sector Purchase Program), but it also rejected the earlier decision by the CJEU in which this latter had found that program to respect EU law. The ruling is as such not directly concerned with Covid-19 measures, but it may have nonetheless important consequences thereon. In this contribution we will explore what those consequences may be. Apart from the direct effects on the ECB’s pandemic emergency purchase programme (PEPP), we zoom in on the ruling’s indirect consequences on the broader question of how to arrange solidarity in EMU. With regard to the latter, we contend that Weiss and the Covid-19 crises combined will test the basic models of solidarity the EMU relies upon: the models of individual fiscal responsibility, ECB based solidarity and the model of fiscal union. These models are assessed from economic, constitutional and democratic perspectives.
Highlights
Right in the middle of the Covid-19 pandemic, the German federal constitutional court (Bundesverfassungsgericht – FCC) issued a ruling that sent massive shockwaves through the continent
Did the Court question the legality of the European Central Bank’s bond buying program Public Sector Purchase Programme (PSPP) (Public Sector Purchase Program), but it rejected the earlier decision by the CJEU in which this latter had found that program to respect EU law
Apart from the direct effects on the ECB’s pandemic emergency purchase programme (PEPP), we zoom in on the ruling’s indirect consequences on the broader question of how to arrange solidarity in Economic and Monetary Union (EMU). With regard to the latter, we contend that Weiss and the Covid-19 crises combined will test the basic models of solidarity the EMU relies upon: the models of individual fiscal responsibility, ECB based solidarity and the model of fiscal union
Summary
Right in the middle of the Covid-19 pandemic, the German federal constitutional court (Bundesverfassungsgericht – FCC) issued a ruling that sent massive shockwaves through the continent. Since the Treaty of Maastricht, EMU law has included a specific solidarity provision (: article 122 TFEU) which demonstrates this solidarity model based on individual Member States’ responsibility.[14] This provision creates the possibility for the Council to act, first, in case of ‘severe difficulties’ in the supply of certain goods (during the corona crisis, the supply of medicines and medical aid could qualify as such) and, second, financial assistance could be provided to Member States in difficulties. An ever more optimistic belief in the market dictated that economies of the European Union would automatically converge.[23]
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