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Germany’s Constitution and European Sovereignty

The recent controversial ruling against the European Central Bank by Germany's Federal Constitutional Court could not have come at a worse time. But it was a necessary reminder that the EU is a community based on the rule of law, and that only its sovereign member states can develop it further.

MUNICH – In addition to the euro crisis, Brexit, and COVID-19, Europe now faces a constitutional crisis, as the Court of Justice of the European Union (CJEU) and Germany’s Federal Constitutional Court (GCC) fight over the policies of the European Central Bank. Although this latest crisis has erupted at an inopportune moment, it had been presaged by a series of earlier rulings and opinions on the ECB’s policies and thus should not have surprised anyone.

In its latest ruling, the GCC accused the CJEU of exceeding its mandate and employing arbitrary reasoning in a December 2018 judgment in favor of the ECB. But the widespread outcry over the GCC’s decision points to a disconnect between what many commentators might wish and legal reality.

Although a hierarchy of authority between the two courts clearly exists on matters of monetary policy, it does not in other policy areas, especially when it comes to the comprehensive and unconventional fiscal rescue policies that the ECB has pursued in recent years with money from the printing press. The ECB should have been specifically authorized to carry out such measures under Article 5 of the EU Treaty. But this authorization was not granted.