06 May 2020

POLITICO: German court lays down EU law

That is the message the country's Constitutional Court sent to the European Union on Tuesday as it delivered a landmark ruling on the legality of the European Central Bank’s bond-buying programs, a decision many observers say challenges both the independence of the ECB and the authority of the Court of Justice of the European Union (CJEU).

At a time of growing tension in the EU over German reluctance to embrace ambitious plans to resuscitate southern European economies hit hardest by the coronavirus by issuing mutualized debt, known colloquially as corona bonds, the court's decision risks inflaming anti-German sentiment. For those in the bloc who fear its biggest member is already too powerful, Tuesday's ruling will add fuel to the fire.

In announcing the ruling, German Chief Justice Andreas Voßkuhle said the CJEU had approved a practice that “was obviously not covered” by the ECB’s mandate. Voßkuhle spent months crafting the 77-page decision, announcing the ruling just a day before his official retirement on Wednesday.

Dismissing a 2018 CJEU decision to allow the bond purchases, the German court ordered the ECB to provide Germany with adequate justification for the program within the next three months. Should it fail to do so, the Bundesbank, Germany’s central bank, would no longer be permitted to participate in the program.

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