Friday

14th Aug 2020

Commission struggles with German court challenge

  • In dismissing an EU court decision, Germany's highest court has challenged the primacy of EU law (Photo: curia.europa.eu)

The EU Commission president Ursula von der Leyen has warned Germany of a possible legal probe over last week's landmark decision on bond-buying by the country's Constitutional Court, based in Karlsruhe - but such a move is highly dicey.

In its ruling, the court instructed the German government to ensure that the European Central Bank (ECB) carried out a "proportionality assessment" of its bond-buying programme within three months.

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Germany's most senior court dismissed a 2018 ruling by the European Court of Justice that had already approved ECB purchases, saying the court moved beyond its competences when it signed off the bank's moves.

The unprecedented decision raised fundamental questions about the independence of the ECB and the supremacy of EU law in the bloc.

On Sunday (10 May), von der Leyen stressed that the EU monetary policy is a matter of exclusive competence, that EU law has primacy over national law and that rulings of the ECJ are binding on all national courts.

Von der Leyen said the commission is looking into possible next steps, including the option of infringement proceedings, the name for EU probes in case a member states breaks the common rules.

The pressure is on the commission to act. But there are limitations what an infringement procedure can do legally, making the decision increasingly a political one.

Under infringement procedures, the commission, through a dialogue, calls on the member states to remedy a breach of EU law and if it fails, then the EU executive takes the member state to the ECJ. This can take years.

But an infringement procedure itself would not overturn the German Constitutional Court's decision, however, and could also run the risk of raising questions over the commission's respect for judicial independence.

It would also put the German government, which does not have control over the court or over its central bank, in a tough spot.

While the procedure is launched against the "conduct of a member state", as one EU official put it, it would have to be the German government who then defends the Karlsruhe decision at the ECJ.

Nevertheless, being tough on Germany could boost the perception of independence of the German commission chief, a long-time ally of chancellor Angela Merkel.

But while there are risks to such legal action by the commission, doing nothing is also a gamble.

"This case goes to the very heart, the very basis of the EU," said one EU official on the German court decision.

"The EU is based on law, on the voluntary agreement by member states," the official said.

The official added that for the EU to function and for EU law to be applied everywhere the same way, there needs to be a common interpretation of the common rules, which only the ECJ can provide.

"The ECJ is the last judge, and it is obligatory for all judges in Europe," the official said, adding that the EU law has primacy over national law, since a case in 1964.

Not 'united states'

Some in Europe, meanwhile, do not agree that the EU's top court should have the the final say, and that EU institutions have gone too far.

Poland's prime minister Mateusz Morawiecki told the German newspaper Frankfurter Allgemeine Zeitung that the Karlsruhe ruling was "one of the most important" in the EU's history and that "the ECJ does not have unlimited powers".

Hungary's justice minister Judit Varga told Magyar Nemzet newspaper that the Budapest government's position has been that countries and their constitutional courts have the final say, if EU and member states competencies clash.

"The decision of the German Constitutional Court confirmed the view that the European Union is not equal to the European United States in this respect".

However, Hungary and Poland has been locked in various legal and political battles with the EU for years over breaking EU rules.

"The union is based on the uniform interpretation and application of union law, otherwise we have no union," the EU official said bluntly.

Merkel: "Solvable'

Meanwhile German chancellor Angela Merkel attempted to diffuse tensions between her country's highest court and the commission by telling her party members on Monday (11 May) that the issue was "solvable".

She said a clash could be avoided if the ECB demonstrates the necessity of its bond-buying scheme.

Detlef Seif, deputy EU spokesman for Merkel's conservative parliamentary bloc in the Bundestag was quoted by Reuters as arguing that the Karlsruhe court had not questioned the primacy of the EU's top court in its ruling.

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