One week after Germany's constitutional court sparked a crisis about the legality of the ECB's QE, promoting an angry response from both the EU and the ECB, members of Germany’s top court continued to defend their controversial decision that questioned the constitutionality of the European Central Bank’s asset repurchase program, saying national courts have a limited oversight role over the bloc’s judges.
AS Bloomberg reported overnight, Peter Huber, who drafted last week’s ruling for Germany’s constitutional court, said the judges wanted the ECB to take responsibility for the QE program and to explain it to those negatively affected, such as all those German savers who have to pay their bank to hold their money. In another newspaper interview, his colleague Andreas Vosskuhle denied that the EU top court always has the last word in matters of the region’s law.
“This ruling is good for Europe because it strengthens the rule of law,” Vosskuhle told Die Zeit. National courts’ decisions “are legitimate and courts are obliged to step in the rare exceptional cases when EU institutions gravely transgress their powers.”
Huber also said the German court only wants proof that ECB’s quantitative easing program is within its mandate. The central bank must show that it hasn’t overstepped its powers, as it doesn’t have the right to make moves just because Europe is in a crisis: "The message to the ECB is actually homeopathic," Huber said Tuesday on Sueddeutsche Zeitung’s website. "It shouldn’t see itself as the ‘Master of the Universe.’ An institution like the ECB, which is only thinly legitimized democratically, is only acceptable if it strictly adheres to the responsibilities assigned to it."
Of course, by now it has long become clear that there is nothing democratic about the technocratic ECB, whose only purpose - as Mario Draghi made clear time after time - is preserving the Euro "whatever it takes" and making the rich richer in the process.
Commenting on the response by Huber, Rabobank's Michael Every wrote this morning that "a German constitutional court judge has spoken about its recent controversial ruling, stating the ECB isn’t ”Master of the Universe”."
"Does that sound like a judicial retreat to you", Every asks? In response, the ECB’s Chief Economist has stated that its asset buying is “proportionate” and will end “as soon as the inflation aim is reached.”
Which to anyone looking at the Bank of Japan will immediately set off alarm bells, as it implies it will never stop – and I would assume the German judges are quite capable of looking at Japan as an example. Risk on or off, would you say?
As a reminder, on May 5 Germany’s top court ruled that the ECB is violating EU law by failing to properly justify its bond purchases program. The judges said Germany’s Bundesbank can no longer participate in the program unless the ECB justifies its policies within three months. The 7-to-1 decision, which goes against a 2018 ruling by the EU Court of Justice that upheld quantitative easing, opened a stark rift between the regional and national courts.
“This is a direct challenge to the core authority of the ECJ, in a context where Poland and Hungary are also under scrutiny of the court for their various infringements to the principle of the rule of law,” said Sebastien Platon, a professor of public law at the University of Bordeaux. “Rejecting that is rejecting the very purpose of this court.”
Unlike Poland or Hungary, the German judges don’t want to stop the EU top court from its oversight of the region’s institutions, Huber said. “We got a lot of applause from the wrong side,” said Huber, referring to comments by Poland’s government lauding the German ruling.
The German judges accept the role of the bloc’s top court and will only intervene in absolute exceptional cases, Huber said. “We want the EU top court to do its job better,” the judge said.