Brussels is expected to initiate infringement proceedings against Germany following a ruling by the country’s Federal Constitutional Court which is deemed incompatible with EU law.
The verdict of the Karlsruhe constitutional judges is believed to have risked undermining the EU legal order by challenging the position of the bloc’s supreme court.
What is the German court accused of?
The Constitutional Court delayed the Berlin government’s approval of a European Central Bank bond purchase program, even though it had already been approved by the European Court of Justice (ECJ).
The German court ruled that the stimulus program, approved by the German government, was partly contrary to the German national constitution.
This ruling was found to have contradicted the Court of Justice, which had previously declared the multi-billion dollar bond purchase program compliant with EU law.
A draft decision quoted by the AFP news agency states that the European Commission has decided to “initiate proceedings against Germany by sending a letter of formal notice”.
According to the note, the German ruling “raises serious concerns” over Germany’s compliance with the “general principles of autonomy, primacy, effectiveness and uniform application of EU law”.
He said the ruling represents “a dangerous precedent for EU law, both for the practice of the German constitutional court itself, and for the supreme and constitutional courts and tribunals of other member states.”
The Karlsruhe court eventually ruled that the bond purchase could go ahead. However, Brussels argues that it should never have intervened because the actions are governed by EU law and not German.
Persistent question for the German judges
The question of the legitimacy or otherwise of the ECB’s multi-billion dollar measures to combat the crisis is regularly examined by the 16 judges of the Federal Constitutional Court.
His controversial decision prevented the German Bundesbank from taking part in the stimulus plan unless the ECB could prove that its government debt purchases were “disproportionate”.
After the ECB forwarded the documents to the German parliament, lawmakers in Berlin last July passed a resolution in which they were satisfied.
The court said the legal appeals were “unfounded because the government and the Bundestag dealt with the content of the ECB’s Governing Council decisions taken after the 5 May 2020 ruling.”
He added that the actions of the government and the Bundestag in the implementation of his ruling were “deemed sufficient”.
The bond program was launched in 2015 to revive the EU economy as the continent struggled to recover from the sovereign debt crisis.
However, some German critics oppose the central bank’s actions to buy bonds and have used German courts to challenge the scheme. They argue that increasing the money supply for the European economy in general could mean more inflation and lower interest rates for German savers.
Plaintiffs included Bavarian conservative lawyer and politician Peter Gauweiler and former leader of the far-right Alternative for Germany (AfD), Bernd Lucke.