Thread by @GrundSebastian

In case you missed it (I did) - on June 15, the @BVerfG (German Constitutional Court) dismissed a challenge against the @ecb's Corporate Sector Purchase Programme (CSPP): bundesverfassungsgericht.de/SharedDocs/Ent… (only in 🇩🇪)

A short thread 1/x

The claimants essentially argued that (i) the @ecb CSPP violated the democratic principles, since the @ecb/@bundesbank conduct large-scale bond purchases without the involvement of the 🇩🇪 Parliament & (ii) the CSPP is an illegal economic policy (rather than mon pol) measure. 2/x

The @BVerfG found the challenge to be inadmissible (i.e. on procedural, not on merit grounds), since the (subject of the) complaint was inadmissible and the complaint insufficiently explained/justified why the CSPP constituted an (illegal) ultra-vires act. 3/x

Somewhat in contrast to the PSPP ruling, the @BVerfG held that acts of EU institutions could not be directly challenged in the @BVerfG. The requirements for an ultra-vires action (the exception to this general rule) have not been proven by the claimants in this case. 4/x

The @BVerfG did however imply that the CSPP would be an economic policy measure (subject to ultra-vires control) if the Eurosystem's purchase would constitute "direct aid" (in a competition law sense). In other words, the @ecb must ensure neutrality of purchases. 5/x

The perhaps most important part of the judgement relates to the inadmissibility of the complaint due to lack of sufficient explanation/justification. First, the @BVerfG noted that the claimants do not explain why the CSPP constitutes an (illegal) economic policy measure. 6/x

Second, and related, the @BVerfG considered the complaint's explanations regarding the breach of EU competition law insufficient. Third, the complaint did not show how the CSPP selectively aids certain companies and thus leads to (challengeable) distortions of competition. 7/x

To sum up, the @BVerfG sensibly restricted a (relatively) unsubstantiated challenge against the @ecb's CSPP. Imo the court could have thrown out the PSPP challenge on similar procedural grounds (but, as we know, chose not to). 8/x

Going forward, the @BVerfG left open a small door for future challenges against the CSPP, noting that selective purchases of corporate debt that result in distortions of competition could be subject to ultra-vires challenges. Not that the @ecb planned to go down this road. 9/end

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