Again, it goes in front of the highest German court for the Whole of the Euro-Zone and Euro will be negotiated with the question of whether the ECB, with its gigantic bond purchases of their skills has exceeded.
The judges of the Second Senate of the Federal constitutional court go to work
Of course, the hearing of the Federal constitutional court on Tuesday and Wednesday in order to money, very much money, but in the centre of the hearing, large right should ask: What is the European Central Bank ECB is allowed? It is subject to adequate control? And what is the relationship between the Supreme German judges in Karlsruhe, Germany and their colleagues from the ECJ, the European court of justice in Luxembourg is actually? This massive rip in the fabric of European institutions, it could.
Although no one expected that the judges could forbid Germany, or more precisely, the Bundesbank, in the multibillion-dollar bond-buying program of the ECB to participate. But legal guard rails for the Central Bank – and for their supervision by the ECJ – which could be the Federal judge before. But let’s start with the money:
Judge a fight? High court in Karlsruhe…
The Crux Of Inflation
Since 2015, the ECB buys government bonds from Euro countries, to a possible Deflation in Europe to prevent. By the end of 2018, the Central Bank pumped around 2.6 trillion euros into the financial markets. If you are not able to imagine this amount, then this may be due to the twelve zeros dragging this gigantic number around: 2.6 trillion EUR 2600 billion Euro, are to 2,600,000 million euros … According to bulky, the Name of the ECB-buying-project: “Public Sector Purchase Program is”. Thus, the ECB wanted to bring the inflation rate close to the targeted Two percent mark. So, that didn’t happen – currently, the Inflation in the Euro-zone at 1.3 percent, and experts expect this year to 1.1 percent.
… and the European court of justice in Luxembourg
Critics of the encounter, but on something else – and this leads, via the money: you see in the program an indirect budgetary financing of highly indebted States. Thus, the Central Bank in excess of your skills, and you run so it is not monetary but economic policy. Several times already, the conflict ended up before the highest courts.
Financing of the budget in a roundabout way?
First lawsuits in the matter there was in 2013, in the meantime, the Federal constitutional court submitted the question of 2017, the European court of justice in Luxembourg for a decision. However, they had shared previously in a preliminary assessment, the concerns of the applicants: States and banks could assume that bonds will ultimately be purchased by the ECB. So a financing of the Budget in a roundabout way. No bond had yet been put back on the market.
In its judgment, is contrary to the ECJ, the German constitutional court language in all the points. The ECB did everything right to realize your purchase program. It would be in the area of monetary policy and to take into account the principle of proportionality.
Now, the Federal constitutional court must in accordance with this decision again in Luxembourg about whether this evaluation is with the German basic law, or whether constitutional rights of citizens are violated. In essence, the question of whether the Federal Republic of Germany and its citizens (financial) burdens to be imposed, to which they have no influence – ultimately it is the democratic legitimacy of the European Central Bank. The Second Senate takes up under the chairmanship of President of the court Andreas Voßkuhle, one and a half days time.
The headquarters of the European Central Bank in Frankfurt/Main
To all of this is made so, therefore, constitutional law experts see in the decision of the Federal constitutional court on the ECB and a further step to clarify the question of how the competences between national constitutional courts and the ECJ will be distributed. Although the judges in Karlsruhe as all countries are bound by constitutional courts in the decisions of the court in Luxembourg; the law of the Union takes precedence over national law. But to check that the judges in Karlsruhe, whether EU law violates the basic law inalienable rights of the citizens guaranteed.
Euro-rebels in court
It is hardly to be expected that the German Supreme judge of the Bundesbank may apply the bond program the ECB to withdraw – that would be the beginning of the end of the ECB and the Euro. Applicant before the constitutional court are, by the way, among other things, the Euro-rebels, such as the AfD-founder Bernd Lucke (in the party) and the CSU-man, Peter Gauweiler, and the financial expert Markus Kerber. In a first judgment in terms of the Euro and the ECB the Karlsruhe judges had written in 1998, but, it would be up to you to stop the Euro: “This is not a matter for the courts, but the government and the Parliament.”
In detail, the judges could guardians of the Currency, however, into the craft mess – and by the way, with your colleagues on the ECJ to create. Finally, the Central Bank is investing the funds from expiring government and corporate securities merrily, even if since January, 2019, with no fresh money is being spent. And ECB chief Mario Draghi has now said it several times, also the new bond purchases would be possible. The judgment of the Federal constitutional court is expected later this year.
ar/hb (dpa, afp – archive)