In the conflict between the German Constitutional Court in Karlsruhe and the European Central Bank (ECB) since May 5, a solution to the problem seems to have been found. The ECB could authorize the transmission of unpublished documents to the president of the German central bank, Jens Weidmann. The latter can then make them known to the Bundestag and the German government. These documents must prove that the ECB has respected the principle of proportionality in its purchases of securities on the markets, questioned by the German judges.
“We have found a pragmatic and reasonable solution, without jeopardizing the independence of the central bank, which is also an essential foundation of German political culture and the European legal order “, said Olli Rehn, Finnish member of the Governing Council of the ECB, in the daily economic paper Handelsblatt. The ECB declined to comment on reports of a solution to the conflict. According to the Reuters newspaper and news agency, these documents could be, for example, internal notes from 2014 council sessions.
Very harsh terms
The Karlsruhe Constitutional Court, in its judgment of 5 May, had challenged, in very severe terms, the constitutionality of the policy of repurchases of public debt securities carried out by the ECB. German judges were considering a large buyout program called PSPP, led by the ECB since 2015 to support the economy of the euro area. They felt that the bank had not sufficiently examined the “Proportionality” of these measures, that is to say the question of whether the positive effects expected from this policy offset its negative side effects, for example the rise in house prices or the formation of bubbles in the markets.
They criticized the European Court of Justice in Luxembourg for insufficient control. The judgment required the ECB council to present within three months, in a new decision, evidence of the examination of this proportionality, without which the Bundesbank, the German public bank, could be prohibited from participating in these takeovers of debt. The deadline expires on August 4.
The judgment had caused considerable stir within the European Union. In addition to the fact that it was seen as an unprecedented attack on the independence of the ECB, it gravely questions the effectiveness of the judicial control of the Court of Justice of Luxembourg, threatening the whole European legal structure. The judges of Karlsruhe are certainly not at their first feat: for years, the second senate of the German Constitutional Court multiplies the attacks against the Court of Luxembourg within a tense “dialogue of the judges”, but not unusual, even in the European Union.
You have 52.18% of this article to read. The suite is reserved for subscribers.
–
