The European Commission reacted to the decision of the German Constitutional Court on the European Central Bank's debt purchase program recalling the primacy of Community law and the binding nature of European Court of Justice judgments.
“Without prejudice to a detailed analysis of today's decision by the German Constitutional Court, we reaffirm the primacy of European law and the fact that the judgments of the Court of Justice of the European Union. The European Commission has always respected the independence of the ECB in its implementation of monetary policy, ”said the spokesman for the community executive.
Eric Mamer was responding, at the Commission's daily press conference, to questions about Tuesday's ruling by the German Constitutional Court, which required the European Central Bank (ECB) to, within three months, justify the conformity of its mandate to vast debt purchases, in a sentence with uncertain implications.
In the past, and in view of doubts already raised by the German Constitutional Court about the ECB's asset purchase programs, the EU Court of Justice has found that they do not violate Union law.
Despite the insistence of the questions, namely on the potential effects that it may have on assisting Member States in the current context of the crisis caused by the covid-19 pandemic, the Commission's main spokesman declined to comment further, “Given the complexity of the issue” and the fact that the sentence was known today.
“We are now going to study this national sentence of the German Constitutional Court in more detail. Given the complexity of the matter, this is our only reaction for now.
In light of today's German Constitutional Court ruling, the powerful German central bank will be banned from participating in the anti-debt buying crisis program, which has gained further breadth due to the covid-19 pandemic, if “the Governing Council” failing to demonstrate "in a comprehensive and substantial manner" "that it did not exceed European treaties", decided the German supreme jurisdiction.
The German Constitutional Court ruled today on the ECB's asset purchase program, which will be the basis for one of the axes to combat the covid-19 pandemic, worth € 750 billion.
Karlsruhe judges rule on the “Asset Purchase Programs” (APP) created by Mario Draghi between 2015 and 2019 after a group of two thousand plaintiffs, led by economists and law professors, started this process for doubting that the program respects German fundamental law.
At stake may be the 'Pandemic Emergency Purchase Program' (PEPP), launched by the president of the European Central Bank (ECB), Christine Lagarde, following the APPs, a 750 billion euro package to combat the crisis caused by the pandemic.
Experts argue that the purchase of assets is illegal because it is the Member States' monetary financing, since each of the eurozone central banks buys, with the support of the ECB, debt issued by the respective states.
This practice is prohibited in European treaties, but the ECB argues that eurozone central banks, by buying debt on the secondary market, and not directly from Member States, are not committing any illegality.
In 2017, the Constitutional Court, assumed to have doubts that the purchase of assets was compatible with the ban on monetary financing, forwarding the sentence to the European Court of Justice (ECJ).
The ECJ has ruled in favor of the ECB and it is now up to the German highest court to interpret the sentence in the light of its constitution.
The ECB's asset purchase program has been instrumental in keeping the debt interest rates of the most indebted eurozone countries at low levels.