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Published : 9. May 2020 8:00:46

The decision of the German court, the European Union, the European Court of Justice, the European Central Bank, the Indian Express said The German decision delighted the Eurosceptics and was supported by governments that were in the EU’s sights. (source: Reuters)

On Tuesday, the German Federal Constitutional Court sent a shock wave through the European Community and questioned the legality of an earlier decision of the European Court of Justice.

The German court ruling, which mainly concerns the bond programme of the European Central Bank (ECB), is primarily seen as a challenge to the long-standing hierarchy of the legal system of the European Union (EU) and has since been taken up by many EU governments and politicians who are critical of the policies of the ECB.

The legal system in the European Union

The Court of Justice of the European Communities (ECJ), a supranational institution, is part of the Court of Justice of the European Union (EUFOR) and is the supreme court of the European Union.

The Court of Justice in Luxembourg, set up in 1952 under the Paris Convention, ensures that Community law is interpreted and applied in the same way in all EU countries and that EU countries and institutions comply with Community law. It resolves legal disputes between national governments and the European institutions.

In a hierarchical sense, the national courts of the EU Member States in the field of Community law are included under the Council of Europe.

German court v. EVRM

In 2018, the ECB decided that the €2 trillion bond purchase programme of the European Central Bank (ECB), designed to revitalise the EU economy after years of the European debt crisis, was legal under EU law.

In Germany, opponents of the programme have appealed for years to the Bundesverfassungsgericht, the highest court in the country, which in turn raised concerns about parts of the programme in 2017. However, this week the German court dropped the biggest bomb.

On Tuesday, the German court ruled that the ECB’s 2018 decision was ultra vires, which falls outside its legal powers, and said it did not adequately answer the question of whether the ECB system was justified for the EU economy.

The German court stated in a press release on the ECtHR judgment of 2018 that this view clearly does not take into account the importance and scope of the principle of proportionality [], which applies to the division of competences between the European Union and the Member States, and which is methodologically simply untenable, because it completely ignores the real economic policy implications of the programme.

If a Member State could easily invoke the power to decide on the validity of EU acts through its own courts, this could undermine the primacy of Community law and jeopardise its uniform application. However, if Member States completely abstain from ultra vires control, they will grant exclusive treaty powers to EU bodies, even in cases where the EU adopts a legal interpretation that essentially amounts to an amendment of the treaty or an extension of its competence, she says.

The German court gave the ECB three months to prove that the bond purchase programme met the real needs of the EU.

Meaning of the judgment

Following this decision, the European Commission underlined the primacy of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) and noted that, despite the analysis of the details of the German Federal Constitutional Court’s decision, we today confirm the primacy of EU law and the fact that the decisions of the European Court of Justice are binding on all national courts.

German domination enchanted the Eurosceptics and was supported by governments under the thumb of the EU. For some months now, the Polish Deputy Minister of Justice has been making it clear that the EU must not exceed its powers and has stated that the German decision is of great importance to his country.

Critics of the German judgment argue that it could affect the legal foundations of the 27-nation zone and that the resulting power struggle between the two courts could lead to a revision of the EU treaties, which in itself is a highly controversial process. Some economists also beat monetary policy judges, both in German and EU courts.

Former Belgian Prime Minister Guy Werhofstadt said: When each constitutional court in each member state begins to give its own interpretation of what Europe can and cannot do, it is the beginning of the end.

Experts believe that the national courts in Poland and Hungary can now follow the precedent set by Germany for challenging decisions of EU courts.

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