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Germany’s Constitutional Court Goes Rogue

Germany's Federal Constitutional Court, heedless of the political consequences for Europe and Germany, has issued a ruling that risks sacrificing the euro and possibly even the European Union. An institution that, under Germany's Basic Law, no one governs is now out of control.

WASHINGTON, DC – On May 5, Germany’s Federal Constitutional Court ruled that the country’s government and legislature had violated the constitution by failing to monitor properly the European Central Bank, and in particular the bank’s public sector asset-purchase program (PSPP). The ruling was as tortuous as it sounds – a shot from the back through the chest and into the eye, as the German saying goes. And therein lies the problem.

In an angry, self-righteous tone, the court argued that it was not bound by a December 2018 ruling by the Court of Justice of the European Union (CJEU) on the same matter, because that court had grossly violated methods of legal interpretation by failing to apply the EU’s “proportionality principle” properly. As a result, the German court found the CJEU’s ruling to be ultra vires (beyond the CJEU’s powers) and therefore not binding.

In other words, an independent court has attacked the legality of a ruling by another independent (and, with respect to EU law, superior) court, for the latter’s supposed failure to police an independent central bank. The age-old question, “Who governs the governors?” (quis custodiet ipsos custodes?), has never been more relevant.