On the reasoning of the ECJ in the PSPP-case

1.745 Germans turned to the Bundesverfassungsgericht claiming that the European Central Bank (ECB) undermined democratic control of the use of state power in Germany. They believed that the new policies of the ECB usurped economic competences that should, according to their constitution and the Treaties, stay in the hands of the national parliament where they can be influenced by the voters. The German court followed the reasoning of the plaintiffs and asked the Court of Justice of the European Union (ECJ) to review the validity of the public sector purchase program (PSPP) that was established by the Governing Council of the ECB. The ECJ recently delivered her ruling in that case. It found that there was no reason to invalidate the program.

The alleged threat to democratic control of government is only mentioned once in the judgement, namely in the description of the claims before the referring court. The ECJ nowhere considers the principle of democratic control of government (in article 2 and 10.1 TEU) for the interpretation of the powers transferred to an independent central bank. The concerns of the Bundesverfassungsgericht remain unaddressed. The ECJ chose other methods of interpretation. This blog will provide a critical review of those choices made by the Court when trying to develop and enforce a standard of review for the compliance with the substantial constraints on monetary policy.

Although those choices of the Court are understandable when viewed separately, they lead to an overall unsatisfactory outcome. They transform substantial constraints into formal constraints, make judicial review of substantial constraints ineffective and undermine the capacity of a treaty to be used as a trust building commitment device. In so far as the participation in the Union, the transfer of powers to the Union and application of EU law in the Member States is conditioned on those substantial constraints by the political or legal constitution of the Member States, the Court, that seems to be unable or unwilling to grant effective protection to those substantial constraints, undermines the full effect, uniform application and further integration.

Continue reading “On the reasoning of the ECJ in the PSPP-case”

6 objections against the AG’s opinion in ECB case


The Advocate General Wathelet delivered his opinion in the case Weiss. The preliminary questions in that case relate to the extensive purchase of public sector debt (PSPP) by the ECB in the secondary market. According to the Advocate General those purchases didn’t transgress the ECB’s mandate and were in full compliance with the prohibition on monetary financing. This blog post makes a critical review of the main arguments made by the AG Wathelet. Continue reading “6 objections against the AG’s opinion in ECB case”