Germany’s top court is about to rule on a key plan that helped it get out of the last crisis the bloc faces
Germany’s top court is about to rule on a key plan that helped it get out of the last crisis the bloc facedA commuter passes an entrance to Alexanderplatz U-Bahn train station in Berlin, Germany, on May 4 2020. Picture: BLOOMBERG/KRISZTIAN BOCSI
The case, pending for almost half a decade, relates to a programme that was designed to spur liquidity in the banking sector amid a slumping euro area economy and interest rates close to zero. The outbreak of the coronavirus in early 2020 gives the case more drama since the ECB set up a much bigger programme to head off the latest crisis.
This sort of argument has been used in countless challenges against European integration, including the Maastricht treaty, the euro, the Greek bailout, the debt-crisis instruments and finally the ECB’s outright monetary transactions programme, a debt-purchase plan that was never put in operation.All of these cases were rejected even as the German judges often expressed concerns in long judgments and sometimes added additional conditions, like needing parliamentary approval for certain measures.
Tuesday’s ruling will not formally cover PEPP, but the court’s reasoning could hold implications for it. Under the combined programmes, the ECB will buy more than €1-trillion of debt through the end of this year. Two years later, the judges asked the European Court of Justice for an interim ruling aimed at limiting the ECB’s authority. But the EU tribunal rejected the restrictive reading of the law suggested by their German counterparts.
Kerber said that if the German court accepts the findings of their EU colleagues, “it will be difficult for it to further claim to be the guardian of the constitution”.The final ruling will come as the coronavirus ravages Europe and the rest of the globe. The decision was initially scheduled to be released in March, but was delayed until this week when most of the continent went into lockdown.
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