09 June 2021

POLITICO: Commission threatens to sue Germany over EU law supremacy dispute

The European Commission on Wednesday launched legal proceedings against Germany over a controversial ruling at the country's constitutional court, arguing that "the integrity" of EU law was at stake.

The Commission announced it had decided to send a letter of formal notice — the first step of an infringement procedure, which can morph into a high-level court case and potentially lead to financial penalties for Germany — "for violation of fundamental principles of EU law."

The decision represents a major escalation in a row over the supremacy of EU law and pits European Commission President Ursula von der Leyen, a former German defense minister, against her onetime boss, German Chancellor Angela Merkel.

The underlying dispute broke out last year when the German constitutional court ruled that the European Central Bank’s 2015 bond-buying program would be illegal under German law unless the central bank could prove the purchases were justified.

Controversially, the Karlsruhe-based court also defied a previous decision by the Court of Justice of the European Union, saying that the EU judges in Luxembourg had acted “ultra vires,” or beyond their competence. This raised concerns that the German ruling could encourage other countries like Poland or Hungary, which are locked in a rule-of-law battle with Brussels, to also question the authority of the top EU court and argue that national law should stand above EU law.

The Commission acknowledged that this concern had been at the forefront when deciding to launch the proceedings against Germany, which come despite the fact that the initial problem behind the court case — the legality of the bond-buying program — has been settled.

The German "judgment constitutes a serious precedent both for the future practice of the German constitutional court itself and for the supreme and constitutional courts and tribunals of other member states," Commission spokesperson Christian Wigand said. "This could threaten the integrity of [EU] law and could open the way to a 'Europe a la carte.'"

Wigand added, "The last word on EU law is always spoken in Luxembourg.”

Germany has two months to reply to the Commission's letter. If the Commission decides that the problem has not been solved by then, it can issue a formal request — a so-called reasoned opinion — ordering Germany to act within two months. If the matter still remains unsolved afterward, it could be sent to the Court of Justice of the European Union for a final ruling. Unless Germany complies with the outcome of that judgment, it faces the risk of a financial penalty.

However, it is unclear what the German government could do to solve the case, given that the issue lies with the constitutional court, which cannot receive orders from Berlin.

Wigand said that "it is for the member state to identify possible solutions. Any solution must be in line with EU law and respect the principle of the primacy of EU law."...

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