Five remarks on the ruling of the Bundesverfassungsgericht in the PSPP-case

On May 5th the Bundesverfassungsgericht (Federal Constitutional Court of Germany; BVerfG) ruled that both (1) the ruling of the Court of Justice of the European Union (ECJ) in Weiss (C-493/17) and (2) the public sector purchase program (PSPP) of the European Central Bank (ECB) – in the context of which 2 trillion in government debt was bought – were ultra vires; and that the Bundesbank (Federal Central Bank of Germany) could only continue its participation in the PSPP after a transitional period of 3 months, if the ECB would undertake a more substantiated proportionality assessment in a new decision (initial decision) of the Governing Council.

This might sound impressive, but it is not. In essence, the BVerfG only requires the Governing Council of the ECB and ECJ to substantiate their decisions so that those decisions would become intelligible to the BVerfG. If this requirement is not fulfilled, the Bundesbank will not be allowed to implement the PSPP and the BVerfG will not abide by the ECJ’s ruling. As the demand for further clarification by the BVerfG is rather modest and easy to satisfy, there seems to be no reason to believe, as some commentators argued, that this judgement undermines the European legal order.

This is even more true since the judgement contains – from a legal point of view – nothing unprecedented. The judgement of the BVerfG

  1. is not the first to declare an ECJ’s ruling ultra vires;
  2. adheres to constitutional safeguards that
    2.1 have been endorsed by the majority of constitutional courts within the EU,
    2.2 have been part of the BVerfG’s case law for more than half a century, and
    2.3 did not undermine the position of EU law in those member states and that time period;
  3. contains criticism of the ECJ’s approach that
    3.1 was already included in the OMT-case,
    3.2 less substantive than in its older ‘Solange I’-criticism, and
    3.3 might improve the functioning of the EU legal order;
  4. contains conditions regarding the participation of the Bundesbank in the ECB program which
    4.1 are not unprecedented, and
    4.2 are less substantial that in the OMT-case;
  5. is part of the checks and balances of a multilevel legal order.

This blog discusses each of these points in more detail below.

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