EU law thread on the decision yesterday of the German Federal Constitutional Court (FCC), holding that ECB decisions on the EU's public sector purchase programme (PSPP) exceed EU competences.
This is based on the press release, available here:
bundesverfassungsgericht.de/SharedDocs/Pre… 1/19
This is based on the press release, available here:
bundesverfassungsgericht.de/SharedDocs/Pre… 1/19
The case is important from an economic perspective, reflecting a particular, and controversial, understanding of the constitutional limits of the ECB's role. That aspect is not considered here. 2/
It is also important from a legal/constitutional perspective. That is what I will be considering here. It is the latest decision in a long saga of cases, in which the German FCC has dealt with the implications of the supremacy of EU law. 3/
It has echoes of similar debates in other Member States (in the UK, in cases such as Factortame, HS2, and Miller); and notably in Poland and Hungary.
And it sheds light on a long-standing tension in the EU legal order. 4/
And it sheds light on a long-standing tension in the EU legal order. 4/
The general principle, well-established since the 1960s in the case law of the European Court of Justice (CJEU), is that EU law is supreme over all national law. It falls to the CJEU to rule on the validity of, and interpret, EU law. 5/
National courts then apply the principle, finding ways to accommodate the principle of supremacy into their legal orders. In general, reliance is placed on the national constitution, or equivalent 'constitutional statutues' like the European Communities Act 1972. 6/
In Germany, there has been long-standing concerns with various aspects of the CJEU's approach. For the German courts, the Member States are the 'masters of the Treaties'. So, national courts have a role in monitoring the outer limits of EU competence. 7/
There have been concerns expressed about the protection of human rights by the CJEU; and about constitutionality of the Maastricht Treaty, the Lisbon Treaty, and various steps relating to the economic governance of the Eurozone. 8/
For many years it was said that the 'bark' of the German courts was worse than their 'bite'. EU law seemed, every time, to pass muster, with the German court setting 'red lines', and then finding that EU action was compatible with them. 9/
There were signs of a more cooperative approach (exemplified in Honeywell), and of more direct engagement with the CJEU (with the German FCC now making references to CJEU). 10/
This case is remarkable for the fact that there was a reference to the CJEU, which decided that the PSPP was lawful under Art 123 TFEU... which the German court, very bluntly, overturned. 11/
The proportionality review undertaken by the CJEU of the ECB's decision was said to be 'not comprehensible', meaning that its judgment was ultra vires. Germany thus has a duty to take active steps against the PSPP. 12/
So... what to make of this?
In practical economic terms, there will likely be some adjustments to the programme; and not a lot will change. (The press release specifies that the judgment does not concern financial measures associated with coronavirus). 13/
In practical economic terms, there will likely be some adjustments to the programme; and not a lot will change. (The press release specifies that the judgment does not concern financial measures associated with coronavirus). 13/
In legal terms, it is much more significant. The FCC is directly challenging a ruling of the CJEU on the interpretation of EU law. It is doing so not because EU law infringes German constitutional law, but because the CJEU rendered an 'incomprehensible' EU law decision. 14/
The decision has (already) emboldened those (eg) in Poland and Hungary who are seeking to assert judicial independence. It represents a significant blow to the authority of the CJEU. 15/
It is the sort of decision which will be discussed for years to come; and it is too early to come to any firm conclusions. It will contribute to the debate on the hierarchical (or not) nature of the EU legal order; constitutional pluralism, sovereignty, etc. 16/
Fwiw, my view is that the hierarchical model propounded by the CJEU is hugely problematic. National courts can, in dialogue with the CJEU, play a key role in the development of the legal order. 17/
But, all sides should recognise that there is an unstable equilibrium. The inevitable tensions can be a source for good. Only through dialogue and cooperation can those tensions be resolved. 18/
This judgment only pays lip-service to those notions. It is a stark and blunt rebuke to the CJEU. Given the - very contested - political and economic context, I think that it was at best, an unwise move. ENDS 19/19
Thanks all! Reminds me that I do enjoy EU law; and affirms the power of twitter.
And a link to Miguel Poiares Maduro's thoughts.
