Did Germany’s Constitutional Court Inadvertently Strengthen the Eurozone?
Despite the knotty issues raised by the court’s recent ruling on the European Central Bank's program to purchase member states' public-sector bonds, there could be a silver lining. It is now more likely that the European Union will be forced to confront the main institutional weakness of its monetary union head-on.
FRANKFURT – In its recent ruling on the European Central Bank’s program to purchase member states’ public-sector bonds in secondary markets, Germany’s Federal Constitutional Court (GCC) concluded that the ECB failed properly to assess and explain the “proportionality” of its policies. In the process, the Karlsruhe-based court rejected the primacy of European law, a core and constitutive principle of the European Union, by also ruling that the decision by the Court of Justice of the EU (CJEU) to uphold the ECB program was “simply incomprehensible,” unconvincing for “methodological reasons,” and exceeded the court’s remit.
And yet, despite the knotty issues raised by the German court’s decision, there could be a silver lining: It is now more likely that the EU will be forced to confront the main institutional weakness of its monetary union head-on.
Admittedly, the move to limit the ECB’s capacity to respond to a global public-health and economic crisis is extremely untimely. But this is a debate about constitutional issues. Principles either count or they don’t, regardless of circumstances or consequences. As one German commentator argued, the ruling could be understood as a face-saving exercise: Karlsruhe demonstrating to the CJEU who is ultimately in charge. Indeed, this is far from the first time that the GCC can be said to have waged a turf war with the CJEU.
We hope you're enjoying Project Syndicate.
To continue reading, subscribe now.
Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.
Already have an account or want to create one to read two commentaries for free? Log in