Abstract
To Boldly Go Where No Court Has Gone Before. The German Federal Constitutional Court’s <i>ultra vires</i> Decision of May 5, 2020
Highlights
The Second Senate as some kind of space ship, en route to fight the Klingons of the European Court of Justice : : : there is some comic relief here, if one engages in a reflection on who is the Captain Kirk of German Constitutional Law
The Facts On May 5, 2020, the Second Senate of the Federal Constitutional Court delivered its final judgment on the constitutional complaints raised against the European Central
It found the PSPP to be not in compliance with the German constitution because it considered it to be not in compliance with European Union law, as it has no basis in EU competences
Summary
According to Art. 19 TEU and Art. 267(3) TFEU, the Court of Justice of the European Union is the court of last resort for questions of interpretation and validity of European Union law. For this lack of balancing and lack of stating the reasons informing such balancing, the ECB decisions at issue violate Art. 5(1) second sentence and Art. 5(4) TEU and, in consequence, exceed the monetary policy mandate of the ECB deriving from Art. 127(1) first sentence TFEU.”15 This is how the Federal Constitutional Court solves the core question that let economists and lawyers clash in the oral hearing: “Is the PSPP still monetary policy (permitted) or is it already economic policy (prohibited)?” According to the Constitutional Court, if the ECB exercises what the German court considers a proper proportionality test processing all the potential economic policy effects of the program the right way, it still counts as monetary policy. The question of hidden—prohibited—monetary financing by means of the PSPP is discussed in the judgment. here the Federal Constitutional Court accepts the CJEU’s result—no monetary financing—despite “considerable concerns”
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