What do you think about the German Federal Constitutional Court’s decision (on 21 june 2016) regarding the European Central Bank’s OMT program ?

I'm not expert on European issues, but it seems to me that Germand Court is now accepting the the decision by the European Court of Justice on the ECB’s OMT program of 2015. Looks like a self-restraint decision in favor of European instituttions.

I think the most important aspect of the decision of the Federal Constitutional Court was the decision of the ECJ in June 2015. The ECJ said that the OMT is within the area of monetary policy and not fiscal policy and -  this is most important to understand the reconsideration of the Federal Court in its second decision -  the OMT has to be conducted within some limits and conditions. Although the Federal Court is still in the opinion that the OMT is fiscal policy, it shares those limits set by the ECJ which forbid the ECB to conduct OMT without conditions. It seems that ECB's permanently articulated reference to price stability serves as a proxy for every measure the ECB takes.

Thanks Juan Carlos, Simon and Christiane, 

I' agree with Christiane as regards the importance of the State and it is the first time that German renonce to establish the priority of its parliament and its souvereinety 

Ines, I don't think that this was the first time the German Constitutional Court backed off a tricky issue of power sharing between the EU and the MSs. In fact, I think it has quite a tradition of doing so. This goes back to the Solange I and Solange II decisions and was continued in the decisions about the Maastricht Treaty and even the Lisbon Treaty. The German Constitutional Court, at the bottom line, always says something like "look, we are still here and we are still the guardians of the German Constitution and if you overstep this line, we will interfere... however, in the present case, the line was not yet overstepped." A benign interpretation would be that they are doing their job by reminding the EU authorities that there are such lines. A less favorable interpretation might suggest that they are desperately groping for relevance without wanting to throw out the baby with the bathwater. Every reader can decide him- or herself which interpretation sounds more persuasive but I do prefer the German approach over most others taken in other MSs, which either show less understanding or less care about the European integration approach and the many difficulties we face when trying to reconcile 28 national policies and interests into a common policy and interest.

Yes Franck,

but I think German costitutitional Court for the first time is a bit less critic with Eu Court and its decision about monetary and economic choice. I think there is a Common point of view even if it is difficult to show that for the German court.

A brief outline:

To the extent that the complainants ask the Court to directly interfere with measures of the European Central Bank, the complaint is rejected as beyond the jurisdiction of the German Court. The complainants ask the Court to declare as unconstitutional the failure of the German Government to intercede against the OMT Program of the European Central Bank whereby the ECB purchases government debt on the open market of members of the Eurozone.

Under Article 23, Part 1, Paragraph 3, the German Constitution transfers sovereign powers to the European Union, and therefore grants to the EU  primacy in questions of the application of EU law. This primacy reaches only so far as the German Constitution and its transfer of sovereign power permit. Acts of the EU not in excess of the acceptable democratic legitimacy of the integration program envisioned in the Constitution do not violate the complainants' constitutional rights. The Constitutional Court may question whether acts of the Union are covered by the integration program set out in the Constitution, i.e., whether they are clearly outside the competence of the powers granted to the Union. The Government is obligated to ensure that acts of the EU do not go beyond the constitutional transfer of sovereign authority.

According to these principles, the German Government has not, through inactivity, violated the constitutional rights of the complainants.

The Court premises its evaluation of the OMT program on the judgment of the European Court of June 16, 2015. This decision that the OMT program is within the competence of the EU and that it does not violate the prohibition against involvement in national political budgetary policy is within the mandate of the European Court.

The European Court based its decision on the goals set for the OMT program, the means and the, in its view, only indirect effects of the program on economic politics. The decision of the European Court was premised on the fundamental axiom of proportionality (Verhältnismäßigkeit) (in American law: a reasonable relation to the purpose - no farther than reasonably necessary to accomplish its purpose).  This proportionality sets binding limits on the implementation of the OMT program. Beyond this is the assumption by the European Court that the activities of the European Central Bank are subject to the judicial control of the European Court.

Considering all the conditions placed on the program by the European Court, the OMT program presents no constitutionally relevant risk to the budget rights of the German parliamant. Consequently no foreseeable danger to its economic-political overall responsibility by the OMT program can be determined.

The German administration and parliament are nevertheless obligated to continually oversee the implementation of the OMT program, not only to ensure that the limitations formulated above are complied with, but also and especially that the volume and risk structure of the accumulated debt, which can change after their acquisition, do not grow into a risk for the federal budget.

Thanks Charles, 

I have to think about what you say to answer to your reflexion. 

Dear Ines,

This was not my reflection, but an outline or summary of the decision. My reflection is that it was well done and might serve as a model for other EU members.

I provided the English language outline so that others can more easily reflect for themselves.

The logical sequence of the decision:

1. The high court of the member state has no power to interfere directly with a union program and can exercise jurisdiction only over acts of the member state 2. Does the Union program come within the powers granted to the Union by the member state? 3. If so, the Union court has primary jurisdiction to interpret the act. 4. Do the acts as interpreted, limited or expanded by the Union court violate the constitutional rights of the citizens of the member state? 5.If they do not, citizens of the member state have no complaint, so long as the Union court maintains jurisdiction, so long as the parameters set out by the Union court are not exceeded and so long as the government of the member state vigilantly monitors the program to ensure that the parameters are not exceeded and that the burdens on the member state do not pose a risk to the member state's sovereign responsibilities.

If the answer to (2) or (4) is negative, the high court can, depending on its national jurisdiction, forbid the member state to participate or limit that participation. Beyond this, it can do nothing.

My further reflection: What saved German participation in the OMP was (1) the Union court decision of proportionality - that the debt purchases do not go beyond what is reasonably necessary to achieve the goal, and (2) the fact that the program is subject to continued judicial oversight.