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Nº16MAY 9

2020

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REQUIEM FOR JUDICIALDIALOGUE – THE GERMANFEDERAL CONSTITUTIONALCOURT'S JUDGMENT IN THEWEISS CASE AND ITSEUROPEAN IMPLICATIONS

Daniel Sarmiento

9PAGE

SUBSTANTIVE EU LAWREVIEW BEYOND THE VEIL

OF DEMOCRACY: THEGERMAN FEDERAL

CONSTITUTIONAL COURTULTIMATELY ACTS AS

SUPREME COURT OF THE EU

Heiko Sauer

2PAGE

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It must have really bothered the Second Sena-te of the German Federal Constitutional Court, the Bundesverfassungsgericht (‘BVerfG’), that it was repeatedly compared with a barking dog that did not bite. On Tues-day, it ultimately bit: it declared both the ECB’s PSPP (Public Sector Purchase Pro-gramme) and the CJEU’s Weiss (C-493/17) judgment that had conrmed the PSPP’s compatibility with EU law to be ultra vires: according to the BVerfG’s judgment (2 BvR 859/15), both EU organs had transgressed the competences that the Member States had conferred upon the EU. On the one hand, the BVerfG’s concerns about the violation of the EMU rules by the ECB should have been mo-re thoroughly addressed by the CJEU befo-re. On the other hand, it is not only the mere result of the judgment that is unacceptable in an ever more challenged community of law. In addition, the BVerfG pretends that it just enforces its well-established ultra vires re-view while in fact it carries out a substantive EU law review in the place of the CJEU, who-

se review is given a dressing-down for being manifestly decient, or literally for being: ‘not comprehensible from a methodological perspective’ (paragraph 153) and ‘objecti-vely arbitrary’ (paragraph 118).

In this Long Read I will rst try to elucidate the German constitutional law context and the development of the BVerfG’s ultra vires review (I.). I will then analyse the reasoning in so far as it declares the Weiss judgment and the PSPP as being ultra vires (II.) and I will conclude with some general observa-tions on the outcome of the judgment (III.).

I. The doctrinal conception and the deve-lopment of the BVerfG’s ultra vires re-view

1. Main premises and features of the BVerfG’s ultra vires doctrine

The BVerfG’s ultra vires review builds on three main premises which have often and rightly been criticised but are only outlined here:

The primacy of EU law has never been fully accepted in Germany. It is only accepted by the grace of the BVerfG, or less suspiciously, it is characterised as a ‘primacy by virtue of

Substantive EU law review beyond the veil of democracy:the German Federal Constitutional Court ultimately

acts as Supreme Court of the EU

1. Professor of German and European Public Law, Rheinische Friedrich-Wilhelms University of Bonn. Many thanks to my colleagues and friendsfor their invaluable comments.

Heiko Sauer 1

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The BVerfG pretends that it justenforces its well-established ultravires review while in fact it carries

out a substantive EU law reviewin the place of the CJEU

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constitutional empowerment’. The BVerfG assumes that the pouvoirs constitués, as a consequence of their subjection to ultimate constitutional limits enshrined in Article 79 para 3 of the Basic Law, cannot vest the EU with the power to set aside these limits. Instead, the BVerfG vests itself with the po-wer to review EU law in order to prevent vio-lations of the German constitutional identity.

An important facet of this identity control is the BVerfG’s ultra vires control. The starting point of this doctrine is the principle of con-ferral pursuant to Article 5 para 1 TEU. From the BVerfG’s perspective, this principle is

constitutionally mandatory: the Basic Law is construed to prohibit the transfer of ‘Kompe-tenz-Kompetenz’ to the EU, meaning the po-wer to determine the scope of its powers. Such transfer would abandon Germany’s sta-tehood, and the pouvoirs constitués are not entitled to do so. This parochial theory of the State forms the basis of the BVerfG’s as-sumption that it must prohibit even a de facto ‘Kompetenz-Kompetenz’ of the EU. And in

the Second Senate’s view, every single ac-tion which does not lie within the EU’s com-petence contravenes Article 20 para 2 of the Basic Law pursuant to which all State autho-rity is derived from the people. The demo-cracy problem of ultra vires acts is thus that they are conceived of as having no connec-tion with the German people. This is how the BVerfG integrated its ultra vires review in Article 79 para 3 of the Basic Law, that is, in its constitutional identity control, in its OMT judgment (2). Nevertheless, and quite incon-sistently, not every transgression of powers by an EU organ is understood to infringe the German constitutional identity. According to

the BVerfG’s Honeywell judgment, only such ultra vires acts that can be seen as a ma-nifest and structurally signicant excession of EU competences can be declared legally irrelevant for Germany (3). This is why the BVerfG had to be so harsh with the CJEU: A simply unconvincing judgment or a slight frontier crossing would not have triggered its ultra vires review.

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constitutional empowerment’. The BVerfG assumes that the pouvoirs constitués, as a consequence of their subjection to ultimate constitutional limits enshrined in Article 79 para 3 of the Basic Law, cannot vest the EU with the power to set aside these limits. Instead, the BVerfG vests itself with the po-wer to review EU law in order to prevent vio-lations of the German constitutional identity.

An important facet of this identity control is the BVerfG’s ultra vires control. The starting point of this doctrine is the principle of con-ferral pursuant to Article 5 para 1 TEU. From the BVerfG’s perspective, this principle is

constitutionally mandatory: the Basic Law is construed to prohibit the transfer of ‘Kompe-tenz-Kompetenz’ to the EU, meaning the po-wer to determine the scope of its powers. Such transfer would abandon Germany’s sta-tehood, and the pouvoirs constitués are not entitled to do so. This parochial theory of the State forms the basis of the BVerfG’s as-sumption that it must prohibit even a de facto ‘Kompetenz-Kompetenz’ of the EU. And in

the Second Senate’s view, every single ac-tion which does not lie within the EU’s com-petence contravenes Article 20 para 2 of the Basic Law pursuant to which all State autho-rity is derived from the people. The demo-cracy problem of ultra vires acts is thus that they are conceived of as having no connec-tion with the German people. This is how the BVerfG integrated its ultra vires review in Article 79 para 3 of the Basic Law, that is, in its constitutional identity control, in its OMT judgment (2). Nevertheless, and quite incon-sistently, not every transgression of powers by an EU organ is understood to infringe the German constitutional identity. According to

the BVerfG’s Honeywell judgment, only such ultra vires acts that can be seen as a ma-nifest and structurally signicant excession of EU competences can be declared legally irrelevant for Germany (3). This is why the BVerfG had to be so harsh with the CJEU: A simply unconvincing judgment or a slight frontier crossing would not have triggered its ultra vires review.

The primacy of EU lawhas never been fullyaccepted in Germany

2. BVerfGE 142, 123 (200 et seq.)3. BVerfGE 126, 286 (304 et seq.).

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The third point is that all these premises do not yet explain why individual complaints can be lodged against EU law actions that do not affect individual rights. The gap that had to be lled by the BVerfG is the famous ‘right to democracy’: The Basic Law phra-ses the principle of democracy as objective law, not as an individual right. But the BVerfG, assuming that democracy is ultima-tely rooted in human dignity, created a fun-damental right to democracy. It broadens the scope of the citizens’ right to elect the mem-bers of the German Bundestag in general, di-rect, free, equal and secret elections pursuant to Article 38 para 1(1) of the Basic Law and thereby establishes a fundamental right that is, albeit solely in the context of European in-tegration, a subjective equivalent of the prin-ciple of democracy. Therefore, it can be used as a trigger of constitutional complaints against the EU, even if these have to be di-rected against the German State organs bea-ring responsibility for the integration pro-cess (‘Integrationsverantwortung’). Accor-ding to the BVerfG, they are under an obliga-tion to prevent the EU organs from infrin-ging the constitutional identity by acting ma-nifestly and seriously ultra vires.

2. Ultra vires case law before the BVerfG

The ultra vires doctrine originated in a deci-sion of 1987 on a constitutional complaint that had challenged the CJEU’s jurispruden-ce that attributes, under certain conditions, di-rect effect to EU directives. Whereas the BVerfG emphasised that, from a constitutio-

nal law perspective, the EU had to respect the limits of its competences, it held that the CJEU was far from exceeding the limits of its mandate (4). In its Maastricht judgment, the Senate repeated, by way of an obiter dic-tum, that ultra vires acts of the EU could not be binding for and in Germany (5). It was as late as 2010 that the second case where an EU act was challenged as being ultra vires was decided. The case concerned the ercely debated CJEU judgment in the case of Man-gold (C-144/04). The Second Senate left open the question whether Mangold was ul-tra vires and whether a possible exceeding of the CJEU’s mandate could possibly be seen as being manifest. It conned its decision to holding that a potential exceeding of the CJEU’s competences was – in that particular case – not structurally signicant (6). In its judgment on the ECB’s OMT which was, in a way, the rst leg of the current PSPP judg-ment, it pronounced dissatisfaction with the CJEU’s Gauweiler (C-62/14) judgment. Albeit in a reluctant way, it came to the con-clusion that both the Gauweiler judgment and the OMT did not manifestly transgress the competences of the EU (7), although only that assumption had led to the Senate’s preli-minary reference (8). As this led to considera-ble mockery, one could have estimated the se-cond reference on very similar questions in the Weiss case as an expression of the BVerfG’s willingness to prevail if it comes to the crunch. But before the PSPP, another potential ultra vires case involving the ECB was ready for decision: The Second Senate held that the SSM regulation as well as the

4. BVerfGE 75, 223 (240 et seq.).5. BVerfGE 89, 155 (188).6. BVerfGE 126, 286 (309 et seq.).7. BVerfGE 142, 123 (214 et seq., at paras 175 et seq.).8. BVerfGE 134, 366.

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SRM regulation, namely the core elements of the EU banking union, did not manifestly exceed the EU’s comp nally, etences (9). Fianother candidate for a potential ultra vires nding of the BVerfG is the pending case of Egenberger (C-414/16) concerning eccle-siastical labour law. It thus remains to be seen whether the Second Senate will soon hit the EU one more time.

II. The application of the ultra vires doc-trine in the case at hand

1. The Weiss judgment as a manifest and structurally signicant excess of EU compe-tences

What lies at the heart of the BVerfG’s erce dissatisfaction with the Weiss judgment is that the CJEU had left considerable leeway for the ECB in the execution of its mandate. In the Second Senate’s view, the CJEU had not sufciently scrutinized the ECB’s as-sumptions, it had contented itself with the fact that both the objective and the instru-ment of the programme fell into the realm of monetary policy, and in particular it had not taken into consideration the evident econo-mic policy effects in the assessment of the PSPP’s proportionality, although these ef-fects might encroach upon the Member Sta-tes’ primary competence for economic po-licy. More generally, the Second Senate the-reby admonishes the CJEU for not suf-ciently protecting the principle of conferral and thus for not preventing the ECB from grasping at the holy grail of statehood, that is, ‘Kompetenz-Kompetenz’. This reasoning is not entirely unconvincing as regards the substantive criticism of the Weiss judgment

and the PSPP. The judgment is nonetheless peppered with fallacies, more precisely with a disregard of at least two most important le-gal differences:

In lowering its standard of judicial review with regard to the ECB the CJEU might have gone too far. Thereby it might not have suf-ciently defended the principle of conferral, the Member States’ primary responsibility for the conduct of economic policy. Let us as-sume this is the case, that the CJEU did not ta-ke seriously enough its mandate, and let us ig-nore the fact that there might be good rea-sons for vesting the ECB with a particularly wide margin of appreciation, such as its expe-rience in monetary policy that might be even higher than the know-how of constitutional judges. Let us thus assume that the Weiss judgment is unlawful. Could this be concei-ved of as being ultra vires? Does not the who-le ultra vires doctrine go back to the premise that the EU, if it avails itself of competences that the German State organs have not confe-rred, encroaches on the principle of demo-cracy and thus violates Germany’s constitu-tional identity? There are cases where judg-ments of the Luxembourg Court can be dis-cussed as being possibly (!) ultra vires. But these cases imply, and they have to imply to t into the scheme, the CJEU’s competen-ces. The Weiss judgment is, from the pers-pective of the Court’s mandate, much more a – possible – underperformance than a trans-gression of its limits. It entails at most a – pos-sible – substantive violation of EU law, but not a violation of the EU’s competences. The BVerfG might have characterised the Weiss judgment as some kind of complicity to an ECB’s ultra vires act and thus might have ex-

9. BVerfGE 151, 202 (302 et seq.).

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plained why the judgment forfeits its binding force. But ac-cusing the CJEU of exceeding its mandate when it is too ge-nerous in its judicial review of the other EU organs is simply not coherent. That the BVerfG’s review of the Weiss judgment is, in fact, not on competences but on sub-stantive law is highlighted by the focus on methodological shortcomings. On the one hand, methodology is inevitable if manifest transgressions must be differentiated from ‘sim-ple’ transgressions of competences. That it is extremely dif-cult to distinguish between monetary and economic po-licy and that such insight should result in particular hesita-tion when it comes to declaring a manifest transgression of the ECB’s mandate is another kettle of sh. On the other hand, methodological aws in a judgment might – again at most – render it unlawful but do not indicate whether a judgment is intra or ultra vires. So the BVerfG gets entan-gled in its own conceptions that have long been criticised for not being all too coherent. If all is about legality, we do not need democracy. But if all is about democracy, the Se-cond Senate should stick to its premises and not equate un-lawful conduct with an exceeding of competences.

The second point is that the BVerfG, even if its review is inevitably shaped by the national constitution, blurs EU and German constitutional law. Its starting point is that a transgression of EU competences must be prevented be-cause it would violate the core of national democracy. Ho-wever, the answer to the question as to whether or not an EU act is to be seen as ultra vires cannot be derived from the Basic Law, but only from the standard of EU constitu-tional law. This is why the Second Senate elaborates on the principle of conferral, on the EMU provisions and on Arti-cle 19 para 1 TEU. But all of a sudden, when it comes to the ECB’s independence pursuant to Article 130 TFEU, the BVerfG asserts that such independence entails, as a compensation, strict scrutiny by the CJEU. This is of cour-se arguable, all the more so from the perspective of a Ger-man scholar familiar with this argument from German constitutional law. But does EU law view the ECB’s inde-pendence, which is by the way expressly approved (if not required) by Article 88 of the Basic Law, really from the

Accusing the CJEU ofexceeding its mandatewhen it is too generous

in its judicial reviewof the other EU organsis simply not coherent.

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perspective of an ‘Einussknick’ (decrease of inuence)? One might doubt that with re-gard to the quite different understandings of democracy in the EU on the one hand and in Germany, especially in the Second Senate, on the other hand. In the EU legal order, a na-tional court should not avail itself of such courageous legal transplants without even considering that EU law might have a diffe-rent meaning, understanding and culture than domestic law.

2. The ECB’s PSPP as a manifest and struc-turally signicant exceeding of EU compe-tences

The BVerfG’s central allegation as regards the PSPP itself is that the Governing Council of the ECB did not sufciently take into ac-count, at least not in a comprehensible and transparent manner, the economic policy ef-fects of the programme which the Second Se-nate elaborates on assiduously. The BVerfG is of the opinion that these effects should ha-ve been weighed against the monetary po-licy objective and the PSPP’s aptitude to achieve it. This is certainly maintainable. Let us therefore assume that the Governing Council was under an obligation to perform such balancing and that it did not do so (the fact that the CJEU contented itself with the monetary policy accounts, namely the pu-blic minutes of the Governing Council’s ses-sions, is not even mentioned by the BVerfG) or that it did do so covertly and thereby vio-lated a legal obligation to publish its balan-cing (which is not self-evident either, given the specicities of monetary policy). Do such procedural deciencies amount to ac-ting ultra vires? The Second Senate asserts this with a single phrase and (quite ironi-

cally!) without giving reasons: ‘For this lack of balancing and lack of stating the reasons informing such balancing, the ECB deci-sions at issue violate Art. 5(1) second senten-ce and Art. 5(4) TEU and, in consequence, exceed the monetary policy mandate of the ECB deriving from Art. 127(1) rst sentence TFEU.’ (paragraph 177). However, the as-sessment that the Governing Council did not take appropriate precautions against a possi-ble transgression of its monetary policy man-date does not entail the conclusion that the ECB did in fact encroach on the Member Sta-tes’ competence for economic policy. The only possible legal consequence is that the Governing Council acted in a procedurally unlawful manner and that it has to remedy this violation if it intends to uphold the PSPP. In other words: a monetary policy instru-ment with a monetary policy objective does not turn into an economic policy measure for the single reason that its economic policy consequences have not been sufciently ta-ken into account. The idea that a court is en-titled to invalidate a measure not because of its established unlawfulness, but because of the lack of an ability to perform its task of le-gal review also stems from German law. Apart from the question of whether this doc-trine can be transferred to EU law without further ado: not stating reasons is never a lack of competence, but simply a lack of suf-cient grounds for evaluating the competen-ce. Again, the BVerfG’s declaration of an ul-tra vires act is thus unfounded. And the ques-tion how a possible violation of Article 123 TFEU (which according to the BVerfG is not manifest) amounts to an ultra vires act is not elaborated on either.

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III. Concluding observations

To sum up, I would like to highlight two points with regard to the ultra vires doctrine. First, the PSPP judgment shows that it is im-possible and inappropriate to conceptualise EU law by virtue of national constitutional law. This is not so much a statement on the primacy of EU law. I would simply like to re-call that it is unconvincing to apply EU law as a standard of review while at the same ti-me pretending that all is about constitutional law. Second, with this PSPP judgment, the BVerfG ultimately turns the right to demo-cracy into a right to lawfulness. And the Ger-man Constitution does include such a funda-mental right. However, apart from the ques-tion whether such lawfulness also means compatibility with EU law, constitutional complaints alleging violations of this right can only be lodged by individuals who are di-rectly affected by the measure in question. This is clearly not the case here with regard to the ECB’s monetary policy. Thus, the cons-titutional complaints should either have been declared as inadmissible in so far as they concern substantive violations of EU law or as unfounded in so far as they concern ultra vires acts. But this was obviously not the favoured outcome.

In the end, the BVerfG engages in this case as if it were the Supreme Court of the EU while ostensibly worrying about German de-mocracy. Even in a constitutional order of pluralism this is hard to justify. It remains to be seen whether the Court can hold the fort. For the time being, it has two trump cards: The right to democracy in theory enables every German citizen, and in practice ena-bles and encourages time and again the same

groups of inveterate opponents of the EMU, to bring cases before the BVerfG. Their re-sistance is of course politically legitimate, but it is not the BVerfG’s task to vitalise the political discourse. With regard to the case at issue, the BVerfG could execute its judg-ment (even ex ofcio!) pursuant to § 35 of the Constitutional Court Act should the ECB’s Governing Council not back down. In the long term however, the Second Senate bears responsibility for a heavy external shock to the community of law which al-ready struggles to cope with quite a few ot-her shocks. Let us hope that the Senate is not out in its estimation that the CJEU, the Com-mission, the ECB and the other national Constitutional and Supreme Courts are going to leap over their own shadows and help close Pandora’s box again. The BVerfG had better make every possible effort not to open it. German constitutional law lays down a principled obligation to take part in European integration, and it would have offe-red many ways to render quite a different judgment. But in the end, ‘whatever it takes’ seems to have outweighed the ‘within our mandate’ caveat.

The BVerfG engages in thiscase as if it were the Supreme

Court of the EU while ostensiblyworrying about German democracy.

Even in a constitutional orderof pluralism this is hard to justify

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The die is cast. After 30 years of irting with the idea of declaring an EU act unconstitu-tional under German law, the German Fede-ral Constitutional Court, the Bundesverfas-sungsgericht (‘BVerfG’) nally pushed the nuclear button and showed the world, like an infant playing with reworks that it cannot control, the spectacular pyrotechnics of its act. It did it, as expected, after a long proce-dure in which it triggered the so-called Ho-neywell protocol: after making a preliminary reference to the Court of Justice and in a case in which the stakes we-re high: the Public Sec-tor Purchase Program-me (‘PSPP’) of the European Central Bank, Mario Draghi’s quantitative easing pet pro-ject, which, according to economists of high repute, was key in keeping the Eurozone out of economic disaster in the aftermath of the nancial crisis.

The BVerfG delivered on 5 May 2020 a hea-vily loaded , launched like a missi-judgmentle directly at the oating line of the EU’s le-gal system, which is the heart of the entire Eu-ropean integration process. By stating that a

judgment of the Court of Justice and an act of the European Central Bank (ECB) are ul-tra vires in Germany, the BVerfG delivered what might be its most signicant ruling in its more than 70-year long history. It could be one of the key moments of European inte-gration. Or it could just be an unfortunate anecdote, a sinister chapter in the EU’s long road towards a more perfect Union, our own Dred Scott, an error stemming from paro-

chial views of parochial lawyers unable to un-derstand the complexi-ties of the world they li-ve in, nor the lethal con-sequences of their lack of vision.

Whatever it may be, only time will tell if we are facing a crucial moment in European in-tegration or simply another chapter in the gradual and convoluted construction of the EU’s legal order. In the meantime, it is worth scrutinizing the decision from a Euro-pean perspective, focusing on its European context, its rights and wrongs, as well as the immediate next steps that should be expec-ted. That is the aim of this Long Read.

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Requiem for Judicial Dialogue – The GermanFederal Constitutional Court's judgment in the

Weiss case and its European implicationsDaniel Sarmiento

1. Professor of EU Law (Complutense) and Editor in Chief of EU Law Live. Many thanks to Pedro Cruz Villalón, J.H.H. Weiler and Heiko Sauerfor insightful comments and pointed criticism to a rst version of this contribution, helping me to focus on this complex matter through theirwise and experienced eyes. The usual disclaimer applies.

1

The Bundesverfassungsgerichtfinally pushed the nuclear button

https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2020/05/rs20200505_2bvr085915en.html

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1. Going nuclear: the BVerfG pushed the button

For most EU lawyers working on constitu-tional law, the ultra vires mantra has resona-ted loudly for several decades (2). First intro-duced in the 1993 of Maastricht judgmentthe BVerfG, it gradually took shape until, in 2010, in the , the Honeywell decisionBVerfG articulated the standard under which it would scrutinize EU acts overstep-ping the EU’s sphere of competence. The standard was quite high and it would be trig-gered only when ‘a structurally signicant shift of competences contrary to the princi-ple of conferral’ was to be found. The con-text of this judgment was a very much con-tested line of case law of the Court of Justi-ce, starting with the , in Mangold judgmentwhich the Luxembourg court declared that Directives, when concretising general prin-ciples of EU law, have direct effect inter pri-vatos. This line of case law triggered a loud reaction among German lawyers that took the matter all the way to the BVerfG, who settled the issue by developing the Honey-well protocol: according to the BVerfG, be-fore declaring an EU act ultra vires, it would

refer the matter to the Court of Justice through a request for a preliminary referen-ce and, eventually, the German court would rule in light of the Court of Justice’s judg-ment. The EU act would only be declared ul-tra vires if, after this thorough review, it evi-denced ‘a structurally signicant shift of competences contrary to the principle of conferral’.

In the Honeywell judgment the BVerfG did not even reach the step of making a prelimi-nary reference to the Court of Justice and it ruled that the Mangold case law was merely an act of interpretation of EU Law, one among several possible outcomes in the hands of the Court of Justice. Therefore, the BVerfG let the Court of Justice off the hook, but it also left the question open for future oc-casions. Some years later, in 2014, the Ho-neywell protocol was put into action, this ti-me with a request for a preliminary referen-ce to Luxembourg, in the . In Gauweiler casethis case, the BVerfG was confronted with the legality of the ECB’s Outright Monetary Transactions (‘OMT’), the measure that fo-llowed Draghi’s ‘whatever it takes’ mo-ment. In an action challenging the inactivity

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2. See Craig, P. ‘The ECJ and ultra vires action: A conceptual analysis’, Common Market Law Review, Vol. 48, Nº 2, 2011.

http://www.proyectos.cchs.csic.es/euroconstitution/library/Brunner_Sentence.pdf

http://www.proyectos.cchs.csic.es/euroconstitution/library/Brunner_Sentence.pdf


http://curia.europa.eu/juris/document/document_print.jsf?docid=56134&text=&dir=&doclang=EN&part=1&occ=first&mode=lst&pageIndex=0&cid=6658099

http://curia.europa.eu/juris/document/document_print.jsf?docid=56134&text=&dir=&doclang=EN&part=1&occ=first&mode=lst&pageIndex=0&cid=6658099



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of the Federal Government and the Bundes-tag, the applicants persuaded the BVerfG to trigger the Honeywell protocol, make a pre-liminary reference and thus take all the steps to eventually set aside OMT. In the end it did not work as the applicants wished, but the BVerfG stressed its deep disappointment with the judgment coming from the Court of Justice in response to its preliminary refe-rence. In the Gauweiler judgment it is ob-vious that the BVerfG disagreed with the Court of Justice’s modest standard of re-view of ECB acts in complex economic mat-ters. But the German court nevertheless con-cluded that the OMT Programme and the judgment of the Court of Justice were not ul-tra vires.

And now, in the Weiss case, when reviewing the second effort of the ECB in launching an asset purchase programme, the BVerfG has applied the same steps and come to the re-sult that, in contrast with past cases, this ti-me the Court of Justice acted ultra vires. As a result, in the absence of guidance from the EU’s highest court, the BVerfG has stepped into the shoes of the EU judge and reviewed the PSPP Decision, ruling that it is poorly reasoned on economic grounds and, as a re-sult, it breaches the principle of proportio-nality and, consequently, it is ultra vires in Germany.

I will not go deeper into the details of the judgment and the ultra vires analysis, since that is the subject of Heiko Sauer’s Long Read in this same issue. I will only highlight the following points:

- The reasons why the BVerfG strikes out the Court of Justice’s judgment in the Weiss case are methodological, not sub-stantive. The BVerfG does not disagree with the solution to which the Court of Justice arrives in Weiss, it departs from it because it considers that it applies the wrong methodological approach by igno-ring ‘the actual effects of the PSPP’, which renders the ruling incomprehensi-ble and arbitrary. In the BVerfG’s view, the Court of Justice should carry out a much more intrusive judicial scrutiny of the measures under review and not simply a ‘manifest breach’ review, despi-te the fact that the case concerns complex economic assessments.

- Once the BVerfG sets aside the Court of Justice’s ruling, it reviews the legality of the ECB’s Decision in light of EU law and comes to a similar, but not identical, conclusion as the Court of Justice on the circumvention of the monetary nancing prohibition laid down in Article 123 TFEU.

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of the Federal Government and the Bundes-tag, the applicants persuaded the BVerfG to trigger the Honeywell protocol, make a pre-liminary reference and thus take all the steps to eventually set aside OMT. In the end it did not work as the applicants wished, but the BVerfG stressed its deep disappointment with the judgment coming from the Court of Justice in response to its preliminary refe-rence. In the Gauweiler judgment it is ob-vious that the BVerfG disagreed with the Court of Justice’s modest standard of re-view of ECB acts in complex economic mat-ters. But the German court nevertheless con-cluded that the OMT Programme and the judgment of the Court of Justice were not ul-tra vires.

And now, in the Weiss case, when reviewing the second effort of the ECB in launching an asset purchase programme, the BVerfG has applied the same steps and come to the re-sult that, in contrast with past cases, this ti-me the Court of Justice acted ultra vires. As a result, in the absence of guidance from the EU’s highest court, the BVerfG has stepped into the shoes of the EU judge and reviewed the PSPP Decision, ruling that it is poorly reasoned on economic grounds and, as a re-sult, it breaches the principle of proportio-nality and, consequently, it is ultra vires in Germany.

I will not go deeper into the details of the judgment and the ultra vires analysis, since that is the subject of Heiko Sauer’s Long Read in this same issue. I will only highlight the following points:

- The reasons why the BVerfG strikes out the Court of Justice’s judgment in the Weiss case are methodological, not sub-stantive. The BVerfG does not disagree with the solution to which the Court of Justice arrives in Weiss, it departs from it because it considers that it applies the wrong methodological approach by igno-ring ‘the actual effects of the PSPP’, which renders the ruling incomprehensi-ble and arbitrary. In the BVerfG’s view, the Court of Justice should carry out a much more intrusive judicial scrutiny of the measures under review and not simply a ‘manifest breach’ review, despi-te the fact that the case concerns complex economic assessments.

- Once the BVerfG sets aside the Court of Justice’s ruling, it reviews the legality of the ECB’s Decision in light of EU law and comes to a similar, but not identical, conclusion as the Court of Justice on the circumvention of the monetary nancing prohibition laid down in Article 123 TFEU.

In the BVerfG’s view, the Court of Justiceshould carry out a much more intrusivejudicial scrutiny of the measures under

review and not simply a ‘manifest breach’review, despite the fact that the case

oncerns complex economic assessments

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- The ground on which the BVerfG decla-res the ECB’s Decisions ultra vires is the breach of the EU principle of proportio-nality, which has been violated due to the ECB’s insufcient reasoning on how it ba-lanced the economic policy effects with its monetary policy objectives. Thus, the review ends up being a process-oriented review, in which the BVerfG rules that the ECB did not take into consideration (or so it appears from the text of the Deci-sion) key factual elements, mostly pros-pective analysis as to the impact of the De-cision.

And thus, we end up with two ultra vires acts: the judgment of the Court of Justice in the Weiss case and the ECB’s Decision go-verning the PSPP programme. In its conclu-ding ndings, the BVerfG grants three months to the Federal Government, the Ger-man Bundestag and the Bundesbank to achieve further justication of the PSPP pro-gramme from the ECB, or otherwise the Bundesbank will be precluded from further participation in the programme.

2. The Day After

Despite the music and rhetoric of the judg-ment, the truth is that its immediate effects are not very far-reaching. The BVerfG can-not impose obligations on the ECB, so the amendment of the challenged Decision is so-mething that is beyond the control of the German Federal Government and the Ger-man Bundestag. They will probably deploy their best efforts to gather all the necessary information to prove that the ECB took into account the considerations pointed out by

the judgment, but it all sounds as if the im-plementation of this judgment will be very disappointing for the applicants. In fact, all cases that are solved on purely procedural grounds tend to be a source of frustration, and this one is not an exception.

Furthermore, the Weiss judgment of the Court of Justice has not been affected in its essence and its legal standing remains, even in Germany as a Member State, where the ECB has its seat and is still bound by the ru-lings of the Luxembourg court. In fact, in its caustic following the press releaseBVerfG’s judgment, the ECB clearly stated that the Weiss judgment of the Court of Jus-tice conrmed the legality of the PSPP Deci-sions, and that is the only judicial authority that the ECB can be bound to.

The impact of the BVerfG’s judgment is al-so questionable and uncertain as regards ot-her ECB programmes. It is true that the la-test pandemic emergency programme (the ‘PEPP’) will certainly be challenged at the BVerfG by the same applicants that brought the Weiss case, but its provisions respond to a very different economic context than that of the PSPP, as well as the safeguards ap-plied. The general remarks laid down in the BVerfG’s judgment are too broad and vague

Despite the music and rhetoricof the judgment, the truth is that

its immediate effects are notvery far-reaching

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https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200505~00a09107a9.en.html

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to consider that they would result in the sa-me outcome if the court was to rule on the PEPP. If the BVerfG wishes to rule on the pandemic emergency programme in the sa-me way it has with the PSPP, it must trigger the Honeywell protocol all over again, which took almost ve years in the Weiss ca-se.

So overall, the immediate effects of the BVerfG’s judgments are quite poor. It’s a pyrrhic victory for the applicants that will hardly satisfy them once they see the overall outcome of ve years of litigation. But we should not confuse the short-term effects with the long term and broad systemic con-sequences that the judgment entails.

3. The BVerfG’s judgment, in its European context

This is not the rst time that a national supreme or consti-tutional court has declared a judgment of the Court of Justice ultra vires. The rst court to do so was the Czech Constitutional Court in 2012 in the , following a ru-Landtovà caseling of the Court of Justice on social security matters that the Czech Constitutional Court was deeply unhappy with, since the Court of Justice sided with the Czech Supreme Court on a matter that had been the source of disa-greement among the Czech Republic’s two highest courts. The Commission ignored the matter and the Landtovà ruling was left aside as an unfortunate anecdote.

In 2016 in , the Danish Supreme Court, Ajosrelying on a previous 1998 precedent (Carl-sen v. Rasmussen), set aside the Court of Jus-tice’s ruling on the direct effect of Directi-ves inter privatos. Unlike the BVerfG in the Honeywell case, the Danish Supreme Court thought that the Court of Justice had gone too far in its Mangold case law and decided that it was not applicable in Denmark. The Commission also ignored the matter and, to date, the Ajos ruling has been left untou-ched.

The Italian Constitutional Court threatened the same manoeuvre in the M.A.S. case, following an un-settling ruling of the Court of Justice in . However, af-Tariccoter some argumentative acro-batics, the Court of Justice ma-naged to amend part of the harm caused in Taricco and de-livered a decision that satised the Corte costituzionale. But the threat worked and the crisis was averted.

In an even more subtle way, the Spanish Constitutional Court, following the Court of Justice’s judgment in , showed its Mellonidiscontent by implying that it was not bound by the ruling. It simply pointed out that the judgment of the Court of Justice was ‘of great use’, which tacitly implied that it did not feel bound by it. In the main proceedings the Spanish Constitutional Court followed the suggestions of the Court of Justice, but it professed to do so on its own authority, not as the result of the binding nature of EU law and the rulings of the Court of Justice.

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This is not the first timethat a national supre-me or constitutionalcourt has declared

a judgment of the Courtof Justice ultra vires

http://curia.europa.eu/juris/liste.jsf?language=en&jur=C%2CT%2CF&num=&parties=landtova&dates=error&docnodecision=docnodecision&allcommjo=allcommjo&affint=affint&affclose=affclose&alldocrec=alldocrec&docdecision=docdecision&docor=docor&docav=docav&docsom=docsom&docinf=docinf&alldocnorec=alldocnorec&docnoor=docnoor&docppoag=docppoag&radtypeord=on&newform=newform&docj=docj&docop=docop&docnoj=docnoj&typeord=ALL&domaine=&mots=&resmax=100&Submit=Rechercher

http://curia.europa.eu/juris/documents.jsf?text=AJOS&oqp=&for=&mat=or&lgrec=en&jge=&td=%3BALL&jur=C%2CT%2CF&page=1&dates=&pcs=Oor&lg=&pro=&nat=or&cit=none%252CC%252CCJ%252CR%252C2008E%252C%252C%252C%252C%252C%252C%252C%252C%252C%252Ctrue%252Cfalse%252Cfalse&language=en&avg=&cid=6660460

http://curia.europa.eu/juris/liste.jsf?oqp=&for=&mat=or&jge=&td=%3BALL&jur=C%2CT%2CF&page=1&dates=&pcs=Oor&lg=&parties=M.A.S.&pro=&nat=or&cit=none%252CC%252CCJ%252CR%252C2008E%252C%252C%252C%252C%252C%252C%252C%252C%252C%252Ctrue%252Cfalse%252Cfalse&language=en&avg=&cid=6660460

http://curia.europa.eu/juris/liste.jsf?oqp=&for=&mat=or&jge=&td=%3BALL&jur=C%2CT%2CF&page=1&dates=&pcs=Oor&lg=&parties=M.A.S.&pro=&nat=or&cit=none%252CC%252CCJ%252CR%252C2008E%252C%252C%252C%252C%252C%252C%252C%252C%252C%252Ctrue%252Cfalse%252Cfalse&language=en&avg=&cid=6660460

http://curia.europa.eu/juris/liste.jsf?oqp=&for=&mat=or&jge=&td=%3BALL&jur=C%2CT%2CF&page=1&dates=&pcs=Oor&lg=&parties=TARICCO&pro=&nat=or&cit=none%252CC%252CCJ%252CR%252C2008E%252C%252C%252C%252C%252C%252C%252C%252C%252C%252Ctrue%252Cfalse%252Cfalse&language=en&avg=&cid=6660460

http://curia.europa.eu/juris/liste.jsf?oqp=&for=&mat=or&jge=&td=%3BALL&jur=C%2CT%2CF&page=1&dates=&pcs=Oor&lg=&parties=melloni&pro=&nat=or&cit=none%252CC%252CCJ%252CR%252C2008E%252C%252C%252C%252C%252C%252C%252C%252C%252C%252Ctrue%252Cfalse%252Cfalse&language=en&avg=&cid=6660460

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With this European context in mind, it shouldn’t come as a surprise that the BVerfG has followed this trend. However, it is wrong to assume that this is business as usual, or just another parochial reaction from another upset national court.

The BVerfG is not an ordinary observer in this conundrum, but quite the opposite: it can be attributed full authorship over the ul-tra vires tool. Constitutional review of EU law is the child of the BVerfG as conceived rst in the Kloppenburg judgment of 1987 and later in the seminal Maastricht ruling of 199 started there (as Heiko Sauer 3 (3). It all has rightly explained in this issue), so the fact that its creator is now pressing the but-ton itself sends a powerful signal to all na-tional constitutional and supreme courts. To date, the precedents of ultra vires declara-tions were seen with deep mistrust and as ex-ceptions coming from rogue and very do-mestic visions of the law. However, after the BVerfG’s ruling in Weiss, the ultra vires test risks becoming an ordinary part of the tool-box of every national court and it could now, after the founding father’s bold move, even hold a certain degree of pedigree before the

cheering national audiences. To defy the pri-macy of EU law in such a way is dangerous for the EU, and for its legal system, to say the least.

Also, the fact that the BVerfG has decided to do it in such a high-prole case sends anot-her daunting message: no matter how exis-tential the issue at stake may be, the judg-ment is inviting all other national courts to go ahead and push the button. The price sta-bility within the Eurozone and maybe the very existence of the Euro is at stake? No problem, go ahead and push the button. The rule of law and the permanence of the country in the EU is at stake? No problem, just go ahead and push the button. Is a natio-nal constitutional court risking turning the system of fundamental rights protection in Europe upside down? It’s ne. The Ger-mans do it, so we can do the same thing too. The list goes on and on.

Have all these courts gone mad? Is this beha-viour the result of ego and power games bet-ween judges, or is there a genuine rationale that justies this course of action?

3. See Craig, P. ‘The ECJ and ultra vires action: A conceptual analysis’, Common Market Law Review, Vol. 48, Nº 2, See Baquero Cruz, J., “TheLegacy of the Maastricht-Urteil and the Pluralist Movement”, EUI RSCAS, 2007/13, available at the EUI Repository.

The reasons why the BVerfG launched its ultravires review are, in fact, grounded on genuineconcerns about power-grabbing in Brussels andtoo many earlier legal acrobatics in the conferralof powers to the EU

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The reasons why the BVerfG launched its ul-tra vires review are, in fact, grounded on ge-nuine concerns about power-grabbing in Brussels and too many earlier legal acroba-tics in the conferral of powers to the EU. The underlying message in the Maastricht judg-ment was mostly a claim of self-restraint ad-dressed to the EU Institutions when treading through elds of shared competence in which Member States still have their sphere of competence. Also, the fact that the Court of Justice’s case law had been so generous with the effectiveness of EU law and, as a re-sult, with EU Institutions in order to promo-te and enforce EU rules, re-sulted in a certain degree of mistrust from national courts towards the Court of Justice as an impartial arbi-ter. So the result is a case law that is claiming the nal word in national constitutio-nal courts, but only for the ex-ceptional cases in which the EU disregards the words of warning and enters, in a ma-nifest and arbitrary way, into areas of com-petence for which it has no powers.

As a tool of last resort to stop the EU from going mad, it is not in itself a bad way of set-ting internal red lines. It can even nd sup-port under international law, as some aut-hors have pointed out. And it played the trick: the Court of Justice introduced a simi-lar approach in its on the ac-Opinion 2/94cession of the EC to the European Conven-tion of Human Rights and the EC’s lack of competence to join the Convention. The Court of Justice’s on the Tobacco Di-rulingrective, striking it out due to the wrong choi-

ce of a legal base, was also a message for constitutional courts, proving to them that the Court of Justice was taking its compe-tences seriously.

However, the way in which the ultra vires tool has evolved in recent years reveals a sig-nicant departure from its original concep-tion. To date, the judgments declaring EU law ultra vires are not good examples of EU arbitrariness, or at least not of the kind of ar-bitrariness that was in the mind of the BVerfG in 1993. They are the result of judi-cial misunderstandings, interpretative mis-

givings and hurt egos, disputes and crises that are very far from what the ultra vires tool should stand for. In Landtovà, the Czech Constitutional Court felt offended because it wrote a letter to the Court of Justice alerting it of the conse-quences of an unfavourable judgment and it never received a proper reply. In Ajos, the Da-nish Supreme Court refused to

accept a European case law that has been en-forced by all national courts, including the BVerfG. If only one single court had an is-sue with that case law, it is good proof that it is hardly an example of an arbitrary or mani-fest breach of EU competences on the part of the Court of Justice, or otherwise many ot-her courts would have jumped in the same way as the Danish Supreme Court. But they did not. In Melloni and M.A.S., the Spanish and Italian constitutional courts irted with the notion of ultra vires but managed to re-solve the differences through interpretation, thus proving that there was no arbitrariness involved, but simply a matter of interpreta-

The way in which theultra vires tool has

evolved in recent yearsreveals a significantdeparture from itsoriginal conception

http://curia.europa.eu/juris/showPdf.jsf?text=&docid=99549&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=6660460

http://curia.europa.eu/juris/document/document_print.jsf?docid=45715&text=tobacco&dir=&doclang=EN&part=1&occ=first&mode=req&pageIndex=0&cid=6660460

https://ukconstitutionallaw.org/2012/02/22/jan-komarek-playing-with-matches-the-czech-constitutional-courts-ultra-vires-revolution/

https://ukconstitutionallaw.org/2012/02/22/jan-komarek-playing-with-matches-the-czech-constitutional-courts-ultra-vires-revolution/

https://onlinelibrary.wiley.com/doi/abs/10.1111/eulj.12215

https://onlinelibrary.wiley.com/doi/abs/10.1111/eulj.12215

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tion. And that is exactly what courts are for: to solve disputes and make use of their inter-pretative tools to reach solutions over the wording of rules of law.

And then we come to the Weiss case and this week’s judgment of the BVerfG. Is this a ca-se in which we face a manifest and arbitrary violation of the Member State’s core sove-reign sphere?

I very much doubt it.

First, although there is much to criticise of the Court of Justice (as of any court; no-body’s perfect!), whatever the causes of the tantrum may be do not justify making such a bold and damaging move. It is true that the Court has rendered some ill-conceived and reasoned judgments (anybody who follows the Court’s case-law has his or her collec-tion of greatest rotten hits) and, unfortuna-tely, after the introduction of the rotating 13-judge Grand Chamber, the number of du-bious rulings has only increased in the cour-se of time. The same is true of the Court’s ap-proach towards evidence and fact, mostly in direct actions and preliminary references of validity, where it is practically impossible to nd precedents in which the Court has bo-wed to expert advice nor listened seriously to anybody who had any expert knowledge that the Court lacks. This way of acting dis-credits the Court in the eyes of any lawyer with experience in domestic or international adjudication, where complex factual issues are always addressed with the assistance of experts, but not with the arrogance of a jud-ge who pretends to know it all. But all these criticisms, legitimate and worrying as they

are, cannot amount to a principled declara-tion of constitutional rebellion from Euro-pe’s most important national constitutional court. It is simply a disproportionate reac-tion that deprives the BVerfG of its claim to act as the ultimate guardian of competence (and, paradoxically, of the proportionality test).

Second, to trigger the ultra vires tool on the grounds of a methodological dispute with the Court of Justice is an irresponsible act that only a very vain and arrogant court can afford. The way in which the Court of Justi-ce has ruled and reasoned for the last six de-cades is well known to all, particularly to na-tional courts. If anybody had any concerns about the standard of review employed or the style of reasoning of the Court’s judg-ments, and considered it a constitutional is-sue that could eventually lead to a manifest breach of EU competence, it should have been raised and addressed in a Treaty re-form (4). If after six decades of case law the BVerfG now realises that it doesn’t like how the Court of Justice reasons and uses its stan-dards of review, what stops the Spanish Tri-bunal Constitucional from setting aside Lu-xembourg judgments simply because they don’t include dissenting opinions? And what would refrain the French Conseil Cons-titutionnel from declaring another Court of Justice ruling ultra vires because it does not use a textual method of interpretation and, instead, it uses a teleological criterion? To push a button designed for cases of extreme arbitrary violations of EU competence by re-ferring to a awed methodological ap-proach of legal reasoning is far from where the ultra vires argument rests. It is so far re-

4. Criticism of the Court of Justice’s reasoning is not new. See, inter alia, Weiler’s critique at Weiler, J.H.H., “Epilogue: Judging the Judges: Apologyand Critique”, Adams, M., de Waele, H., Meeusen, J. and Straetsmans, G. (eds.) Judging Europe’s Judges, Hart Publishing, 2013.

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moved, that it creates doubts as to whether it is the BVerfG itself that is acting beyond its competence.

Third, the concern of the BVerfG with the Court’s standard of review and economic as-sessments is questionable to say the least. The BVerfG prides itself in not shying away from entering complex assessments of a technical nature that require expert know-ledge from non-lawyers. Hearings at the BVerfG can involve long hours listening to economists and judges that engage with the economists, with judgments that reect how at ease the court can be in non-legal waters. The Court of Justice is more cautious. In fact, the Court of Justice acts like most courts do and, therefore, it tends to treat non-legal arguments with utmost care. In a well-established approach, very much in-uenced by French administrative law, the Court of Justice avoids entering into policy and technical issues because otherwise it will be the Court who sets policy and techni-cal matters with an authority and expertise it can hardly claim. If the Court of Justice in-trudes too far into the eld of monetary po-licy, it will turn itself into a central bank and it will stop being a court. Taking technical expertise seriously is a serious matter, but for precisely the opposite reasons than the BVerfG appears to believe.

In a paradoxical turn of events, the BVerfG accuses the Court of Justice of not entering into complex technical assessments and, as a result, it rules that the Luxembourg court has acted beyond its powers under Article 19 TEU. However, it is exactly because the Court of Justice is cautious when handling economic assessments, that the Court re-

mains within its powers to avoid turning in-to something other than a court of law. The aw in the BVerfG’s reasoning is so funda-mental, that it can only be attributed to its isolated and self-referential way of thin-king. Any court that deals with complex technical matters is well aware of the risks of going too far into non-legal assessments, but the BVerfG seems to be perfectly at ease with it and it wrongly assumes that all courts should do the same. In its parochial view of the world, in which the standard of review in complex and relevant cases can only be the one undergone by itself, it asserts that only its own way of acting can be satisfactory, irrespective of the fact that they are only one among a large community of legal traditions and supreme and constitutional courts, re-presenting different sensitivities and diffe-rent ways of approaching judicial dispute settlements.

To make things worse, the BVerfG reveals its own contradictions by limiting its pro-portionality test of the ECB’s Decision to a process-oriented review. In the end, not even the BVerfG feels courageous enough to dive into the complexity of the underl-

It is exactly because the Court ofJustice is cautious when

handling economic assessments,that the Court remains within its

powers to avoid turning intosomething other than a court of law

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ying issues, and it ends up striking out the ECB’s Decisions due to a lack of reasoning. If intensive judicial review is so relevant, the BVerfG proves itself wrong and tacitly ends up admitting that such review is a faça-de, an attractive mirage that makes the rea-der believe that the court will review it all, whilst in reality it backs away from assu-ming the responsibility (and the risks) of its own damaging actions.

So overall, this is not the ultra vires declara-tion that the BVerfG was probably thinking of back in 1993. It is not a reaction to an arbi-trary and manifest violation of competences by the EU. And if it is none of the above, the sad truth is that we are facing an unfortunate and capricious act of judicial arrogance. Seen in this light, the judgment is not a se-rious wake-up call for the EU and its use of power. It is rather a wake-up call for those who believe that the EU is a community of law that can rely on its highest courts to take sensitive and nal decisions. This week’s judgment is good proof that integration through law has limits, and we have reached what is probably the end of a long and las-ting stage of integration through courts and judicial dialogue. By pressing the nuclear button on such frivolous terms, the BVerfG has put to rest decades of judicial efforts in building a community of law to which all ju-risdictions felt they could belong to.

4. The future

So what should we expect in the medium and long term? As I just argued, we are fa-cing the end of an era, a time now past in which high expectations were deposited on the wisdom and prudence of high courts,

both European and national. If the leading re-presentative of national judicial reasonable-ness and reliability, the BVerfG, has proved to be manifestly unt to engage as a cons-tructive participant in this community, the system must undergo a profound transfor-mation. Some of the changes will be pain-ful, but others are just the natural and inevi-table consequence of this week’s ruling.

First, the Commission must launch an in-fringement action against Germany. It is im-possible for the Commission to remain sit-ting still. Shortly after the BVerfG’s ruling, the Polish authorities appointed four new judges to the Supreme Court invoking the Weiss precedent and declared the Court of Justice’s decisions on the Polish judicial re-forms ultra vires. The Commission cannot act against Poland and then stay put when it comes to Germany. The principle of equa-lity among States is enshrined in the Trea-ties and the Commission must abide by it. In fact, an infringement action against Ger-many would be the right message, showing that if the most powerful of national courts cannot get away with rogue behaviour, ot-her rebellious courts should get ready and stand in line. Also, the infringement action would allow the Federal Government, the German Bundestag and the Bundesbank to realise that their European obligations are not so easy to elude, leaving the BVerfG in the isolation it deserves.

The Commission mustlaunch an infringementaction against Germany

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Second, the time of legal pluralism and judi-cial dialogue will have to be reset and the EU’s judiciary will need a Treaty reform, as well as constitutional amendments in natio-nal law. The reader will say that this is im-possible, but the alternative is worse. If the principle of primacy of EU law is too hard to digest, then the Treaties should at least in-clude a clear reference to the primacy of the

Court of Justice’s judgments, as a technica-lity that ensures legal certainty and provides stability and coherence to the EU legal or-der. And the same should be introduced in national constitutions, setting clearly, as a re-sult of the will of the people, that when it co-mes to the interpretation of EU Law, there is only one nal voice. Ironically, the BVerfG’s judgment will make everyone rea-lise how dangerous it is to have self-empowered and unelected national courts turning themselves, with no clear legal basis to do so under EU law, into the ultimate in-terpreters of EU law itself. In the same way that the golden rule on scal stability has been introduced in national constitutions (at the request of Germany and other scally frugal Member States during the nancial

The time of legal pluralism and judicialdialogue will have to be reset and the

EU’s judiciary will need a Treaty reform,as well as constitutional amendments

in national law

20LAWEU LIVEstay alert keep smart

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Nº16 · MAY 9, 2020

crisis), it is now legitimate and fair to de-mand from all Member States the same guarantee in national constitutional law, in order to protect the primacy of the judg-ments of the Court of Justice, or otherwise risk the dissolution of the rule of law and the integration process as we have known it thus far.

And third, this saga has proved, once again, how lethal and damaging it is to put the entire weight of signicant constitu-tional matters exclusively in the hands of courts, experts and non-elected institu-tions. The failure of Europe’s political es-tablishment to reach a comprehensive so-lution to bring the Eurozone out of nan-cial chaos in 2008 resulted in decisive ac-tion by the ECB, later conrmed by the Court of Justice. Now, the past failures of politicians have returned with a vengean-ce, questioning not only the vigorous reac-tion of the ECB then, but also endange-ring recent steps in the midst of a severe health and economic crisis. And despite the fact that the ECB and the Court of Jus-tice kept within the remits of their manda-tes to the best of their abilities, none of that matters when confronted by extrava-gant national courts willing to show their domestic audiences that they have somet-hing to prove.

The time of integration through law is not over, but it is denitely over as we have known it to date. Making it work in the fu-ture will be an existential challenge if the EU is to survive as a successful political and economic project. To that end, the EU and its Member States must react fast, heal the wound so irresponsibly inicted

by the BVerfG, and set the foundations of a Union based on reinforced values of de-mocracy and the rule of law. Looking the other way will simply prolong the agony and eventually, in due course, put the pa-tient to rest.

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The Court of Justice has issued a press release in respon-se to the ‘many enquiries’ it has received about the Ger-man Federal Constitutional Court’s (Bundesverfas-sungsgericht) and noted that ‘the departments of rulingthe institution never comment on a judgment of a natio-nal court’. However, it also made the following remark: ‘In order to ensure that EU law is applied uniformly, the Court of Justice alone - which was created for that pur-pose by the Member States - has jurisdiction to rule that an act of an EU institution is contrary to EU law’. It warns against jeopardizing the unity of the EU legal or-der and detracting from legal certainty, and recalls that 'national courts are required to ensure that EU law takes full effect'.The CJEU’s press release is available .here

Court of Justice of the European Union European Central Bank

How the world reacted to the German FederalConstitutional Court's Ruling on the Weiss case

INSTITUTIONS

European Commission spokesman Eric Mamer

European Commission spokesman Eric Mamer‘Notwithstanding the analysis of the detail of the Ger-man Constitutional Court decision today, we reafrm the primacy of the EU law, and the fact that the rulings of the European Court of Justice are binding on all na-tional courts’Reported by Reuters

European Commission

Nº16 · MAY 9, 2020

The ECB ‘takes note of German Federal Constitutional Court ruling’ and ‘remains fully committed to doing everything necessary within its mandate to ensure that ination rises to levels consistent with its medium-term aim and that the monetary policy action taken in pursuit of the objective of maintaining price stability is trans-mitted to all parts of the economy and to all jurisdictions of the euro area’. It recalled that ‘the Court of Justice of the European Union ruled in December 2018 that the ECB is acting within its price stability mandate’.A press release is available on the .ECB’s website

Jens Weidmann, President

The BVerfG’s ruling ‘highlights important features of the PSPP which, overall, ensure a sufcient safety mar-gin to monetary nancing of governments’. ’The Go-verning Council of the ECB now has a period of three months to present its deliberations regarding the pro-portionality of the programme. While respecting the in-dependence of the ECB’s Governing Council, I will sup-port efforts to meet this requirement’.A press release is available on the website of the Deuts-ches Bundesbank

Deutsche Bundesbank

LAWEU LIVEstay alert keep smart

https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/EN/2020/bvg20-032.html

https://curia.europa.eu/jcms/jcms/Jo2_7052/en/

https://www.reuters.com/article/ecb-policy-germany-commission/eu-law-and-eu-top-court-have-primacy-over-german-national-law-eu-commission-idUSL8N2CN4HA

https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200505~00a09107a9.en.html

https://www.bundesbank.de/en/press/press-releases/statement-by-bundesbank-president-jens-weidmann-on-the-judgement-of-the-federal-constitutional-court-bundesverfassungsgericht--832414

https://www.bundesbank.de/en/press/press-releases/statement-by-bundesbank-president-jens-weidmann-on-the-judgement-of-the-federal-constitutional-court-bundesverfassungsgericht--832414


weekend edition


By Matej Avbelj

Professor of European Law at the Graduate School of Go-vernment and European Studies at Kranj, SloveniaA take on the BVerfG ruling as an unsurprising develop-ment within a system of constitutional pluralism, and as an opportunity to concentrate on the structural problems posed by the constitutional role of the ECB. The author argues that the position of Karlsruhe should be taken se-riously by the Court of Justice, which should reconsider its lax and deferential scrutiny of the ECB.Published in Verfassungsblog

The Right Question about the FCC Ultra Vires Decision

By Miguel Azpitarte

Associate Professor of Constitutional Law at the University of GranadaThe author points out that the BVerfG’s ruling places the ECB's future purchase plans under strict surveillance, re-calling that this was the only area of the Union where Germany did not have a dominant inuence. Moreover, he stresses that this ruling delimits the eld of action of the German Government in future reconstruction nego-tiations. This leaves little room for Eurobonds or any ot-her action involving a redistribution of wealth beyond the EU’s ordinary budget.Published in Agenda Pública

El Tribunal Constitucional alemán os-curece el futuro

Nº16 · MAY 9, 2020

ACADEMIA

Alexander Brade and Markus Gentzsch

Research Assistants at the University of Leipzig‘The BVerfG fails to recognise, on the one hand, the broad discretion of the ECB and, on the other hand, the lower density of judicial control that necessarily results from this’. The authors argue that, with its judgment on the PSPP, the BVerfG itself might have exceeded the li-mits of its jurisdiction and thus, to a certain extent, acted ‘ultra vires’ itself.Published in Verfassungsblog

PSPP mit ‘PEPP’: Der währungspolitis-che Kontrollmaßstab des BVerfG als „Ultra-vires-Akt“?

By Peter Bofinger

Professor of Economics at the University of WürzburgThe author argues that the BVerfG’s ruling ‘reveals an economic view that is as one-sided as it is limited, which will harm Europe and thus also Germany’. In this regard, he expresses that ‘it is unclear how the Court can come up with the idea that the ECB, in its policy geared to the currency area as a whole, must also take account of the effects on the interests of individual groups in indi-vidual Member States in addition to these objectives sta-ted for the EU’.Published in Makronom

Die Verfassungsrichter beschädigen die Unabhängigkeit der EZB

https://verfassungsblog.de/vb-vom-blatt-das-bverfg-und-die-buechse-der-ultra-vires-pandora/

http://agendapublica.elpais.com/el-tribunal-constitucional-aleman-oscurece-el-futuro/

https://verfassungsblog.de/pspp-mit-pepp/

https://makronom.de/die-verfassungsrichter-beschaedigen-die-unabhaengigkeit-der-ezb-35807

23

weekend edition


By Erik Jones

Professor of European Studies and Director of European and Eurasian Studies at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins UniversityThe author argues that the BVerfG’s real challenge is to the German Federal Government and the German Fede-ral Parliament, which have been placed in ‘an impossi-ble situation’, to the extent that ‘a German constitutio-nal struggle may not be far behind’.Published in the Blog of the International Institute for Strategic Studies

Germany’s coming constitutional tur-moil By Matthias Kottmann and Roya Sangi

The authors critically assess the BVerfG ruling as mainly addressing the Karlsruhe-Luxembourg rela-tionship and undertaking a technical supervisory exa-mination of the Court of Justice. They bring to the fore several aws in the ruling, inter alia that (i) the propor-tionality test applied by the BVerfG corresponds to the one developed in Germany for the area of fundamental rights, and that therefore it is doubtful that it is a suitable tool for EU judicial review of ECB competences; (ii) the lack of a sound justication necessary to regard another view as ‘arbitrary’; note that (iii) ultra vires and identity checks are not only dogmatically shaky, but also struc-turally unsuitable for checking EU acts; and (iv) that the BVerfG’s choice of words is inappropriate for a com-munity based on the rule of law.Published in Verfassungsblog

Gut gemeint, nicht gut gemacht

Nº16 · MAY 9, 2020

By Dimitrios Kyriazis

Head of the Law Faculty at the New College of the Humani-ties, LondonThe author points out some of the most prominent eco-nomic, legal and political ramications of the BVerfG ruling, arguing that it amounts to a powerful blow to the principle of primacy of EU law that may make other Member States feel emboldened to disregard the Court of Justice’s rulings.Published in European Law Blog

The PSPP judgment of the German Constitutional Court: An Abrupt Pause to an Intricate Judicial Tango

By Andrej Lang

Research assistant at the Chair of Public, European and International Law at the Martin Luther University Halle-WittenbergThe author identies some of the potentially far-reaching consequences of the BVerfG’s ruling for the European Economic and Monetary Union, the role of the ECB in the institutional architecture of the EU, the current European disintegration process, and the BVerfG itself.Published in Verfassungsblog

‘Keine leichte Kost’: Das BVerfG zwingt die EZB zur Rechenschaft


https://www.iiss.org/blogs/survival-blog/2020/05/germany-coming-constitutional-turmoil

https://www.iiss.org/blogs/survival-blog/2020/05/germany-coming-constitutional-turmoil

https://verfassungsblog.de/gut-gemeint-nicht-gut-gemacht/

https://europeanlawblog.eu/2020/05/06/the-pspp-judgment-of-the-german-constitutional-court-an-abrupt-pause-to-an-intricate-judicial-tango/

https://verfassungsblog.de/keine-leichte-kost/

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weekend edition


Nº16 · MAY 9, 2020


By Matthias Lehmann

Director of the Institute of Private International and Compa-rative Law at the University of Bonn‘Finally, they have done it’. In his analysis, Matthias Lehmann highlights that the ECB will now be subject to a much higher degree of judicial scrutiny than the CJEU wanted to impose, and that the proportionality analysis will serve as a powerful weapon in the hands of the Ger-man judges.Published in the Blog of the Faculty of Law of the Uni-versity of Oxford

The End of ‘Whatever it takes’? – The German Constitutional Court’s Ruling on the ECB Sovereign Bond Program-me

By Franz C. Mayer

Professor for European and public international law at the University of BielefeldThe BVerfG’s judgment, which explains to the Court of Justice ‘in a rather schoolmasterly manner’ that it did not properly examine the exercise of competence by the ECB, is partially surprising, as well as disappointing, not convincing, contrary to the BVerfG’s task to provide for stability, and ‘very German in the ominous sense’.Published in Verfassungsblog

Auf dem Weg zum Richterfaustrecht? Zum PSPP-Urteil des BVerfG

By Miguel Poiares Maduro

Professor at the School of Transnational Governance at the European University Institute in Florence and former Advo-cate General at the Court of JusticeThe author reasons why the BVerfG ruling may not have a strong impact on the ECB’s Public Sector Purchase Programme to which it refers. However, it points out that the judgment may have highly problematic market effects, inter alia because of the uncertainty it will gene-rate in the short term, the constraints arising from it for Germany’s participation in the EU response to the coro-navirus situation, and the possible opening up of a dan-gerous path to be explored by illiberal regimes in the EU.Published in Verfassungsblog

Some Preliminary Remarks on the PSPP Decision of the German Constitu-tional Court

By Armin Steinbach

Head of the economic policy unit of the Federal Ministry for Economic Affairs (Germany) and Lecturer at the University of BonnThe author argues that the BVerfG ruling does not repre-sent a categorical break in the established cooperative re-lationship between Karlsruhe and Luxembourg, but es-sentially a judgment about the requirements of propor-tionality as a parameter of control of EU institutions and bodies. Armin Steinbach stresses how this judgment further contributes to a reinforced procedural scrutiny of ECB action as a means to compensate its independen-ce and scarce democratic legitimacy.Published in Verfassungsblog

Ultra schwierig

https://www.law.ox.ac.uk/business-law-blog/blog/2020/05/end-whatever-it-takes-german-constitutional-courts-ruling-ecb?fbclid=IwAR1-W64ZsU2YC8G67c1iMxb2CvdXzmTtxdgzRD8rxu0wTiE5bOxW1JYTqTA

https://www.law.ox.ac.uk/business-law-blog/blog/2020/05/end-whatever-it-takes-german-constitutional-courts-ruling-ecb?fbclid=IwAR1-W64ZsU2YC8G67c1iMxb2CvdXzmTtxdgzRD8rxu0wTiE5bOxW1JYTqTA

https://verfassungsblog.de/auf-dem-weg-zum-richterfaustrecht/

https://verfassungsblog.de/some-preliminary-remarks-on-the-pspp-decision-of-the-german-constitutional-court/

https://verfassungsblog.de/ultra-schwierig/

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weekend edition


Nº16 · MAY 9, 2020

By Gian Luigi Tosato

Professor of EU Law at the University of Luiss Guido Carli, RomeThe author points out the two different sides of the BVerfG ruling: one that is conicting and controversial with respect to the Court of Justice; and one that is more conciliatory towards the ECB and aware of the impor-tance of the PSPP in the functioning of the eurozone. It is to be expected that ‘serious tensions will arise bet-ween the two courts, in contrast to the spirit of effective collaboration that should shape their relationship’. Published in Luiss School of European Political Eco-nomy Website

The Decision of the German Constitu-tional Court on the Public Sector Pur-chase Programme of the European Cen-tral Bank: Preliminary Observations

By Marijn van der Sluis

Assistant Professor in Constitutional Law at Maastricht UniversityIn his analysis of the BVerfG, ‘a decision that is going to shape the future of the euro, and thus the EU’, Marijn van der Sluis identies some of the potential problems it poses for the current efforts of the ECB in the corona cri-sis. He stresses that in the many issues of the judgment ‘there is enough ambiguity for the BverfG to accommo-date other interpretations, but it is clear that the BverfG seeks to take a different approach to EU law’.Published in EU Law Live

Karlsruhe bites with a vengeance

By Michael Wilkinson

Associate Professor of Law at the London School of Econo-mics and Political ScienceThe author considers the BVerfG’s ruling ‘is damning and will damage an already fragile constitutional fabric, as well as potentially encourage other increasingly Eu-rosceptic courts to contest the ECJ’s authority’. He ar-gues that the judgment ‘is aimed as a warning against Corona measures (…) and more broadly against any risk sharing, that would be in violation of core German constitutional identity in order to protect the budgetary autonomy of the Bundestag against further mutualisa-tion’.Published in Verfassungsblog

Fight, flight or fudge? First reflections on the PSPP judgement of the German Constitutional Court


By Alexander Thiele

Habilitated Senior Research Fellow in public and European law at the University of GöttingenThe author critically points out that the BVerfG’s ruling has unnecessarily opened the ultra vires Pandora’s box, makes it easier for any Member State to ignore unpopu-lar judgments from the Court of Justice, thereby eroding the rule of law in the EU. Specic criticism is made of the fact that the German constitutional court does not ta-ke into account the specics of monetary policy. On the positive side, the author stresses that this ruling will be a strong incentive for the ECB to pay more attention to the justication of its decisions in the future.Published in Verfassungsblog

VB vom Blatt: Das BVerfG und die Büch-se der ultra-vires-Pandora

https://sep.luiss.it/brief/2020/05/06/g-l-tosato-decision-german-constitutional-court-public-sector-purchase-programme-eu

https://sep.luiss.it/brief/2020/05/06/g-l-tosato-decision-german-constitutional-court-public-sector-purchase-programme-eu

https://eulawlive.com/analysis-karlsruhe-bites-with-a-vengeance-by-marijn-van-der-sluis/

https://verfassungsblog.de/verschroben-verhoben/

https://verfassungsblog.de/vb-vom-blatt-das-bverfg-und-die-buechse-der-ultra-vires-pandora/

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weekend edition


Nº16 · MAY 9, 2020

By Jacques Ziller

Professor of EU Law at the University of Pavia, former Pro-fessor of Public Law at the University of Paris-1 Panthéon-SorbonneThe author claims that the BVerfG ruling is based on an ‘unsustainable reasoning’. He argues that ‘the judges, who demonstrate unfounded intellectual arrogance in their claim to interpret EU law, make manifest errors in applying the principle of proportionality to the delimi-tation of competences between the Union and the Mem-ber States. They also make methodological errors in their application of the principle of proportionality to ECB decisions, while highlighting their prejudices in the eld of monetary and economic policy’.Published in Blogdroiteuropéen

L’insoutenable pesanteur du juge constitutionnel allemand

By Bernhard Wegener

Professor of Public and European Law at the Friedrich Ale-xander University of Erlangen-NurembergThe verdict of the BVerfG is depicted as ‘an eccentri-city’ damaging the own court and the already fragile Eu-ropean cooperation. The author puts many of the ru-ling’s underlying premises into question: Can a court, and a court that is only a Member State court, effecti-vely control the monetary policy of the ECB? Is this really about the adequate assessment of proportiona-lity? Is it possible for a court to assess monetary policy measures better than the institutions actually responsi-ble for them and endowed with decisive independence by the constitutional legislator? Published in Verfassungsblog

Verschroben verhoben! Traurige Ein-blicke in Karlsruher Parallelwelten

PRESS

Published in BBC News

The BBC highlights that ‘the Constitutional Court in Karlsruhe says there is not enough German political oversight in the purchases’, and that the claimants befo-re the BVerfG ‘are a group of German academics, inclu-ding a former leader of the far-right Alternative for Ger-many (AfD), Bernd Lucke’.

German court criticises European Cen-tral Bank crisis bond-buying

Published in El País

According to the Spanish newspaper El País, the BVerfG’s judgment ‘risks feeding ultra-nationalism’ and makes urgently necessary ‘a clear position not only from the ECB, but also from the Court of Justice’.

Sentencia antieuropea


https://blogdroiteuropeen.com/2020/05/08/linsoutenable-pesanteur-du-juge-constitutionnel-allemand-par-jacques-ziller/

https://verfassungsblog.de/verschroben-verhoben/

https://www.bbc.com/news/world-europe-52542993

https://elpais.com/opinion/2020-05-05/sentencia-antieuropea.html


weekend edition


Nº16 · MAY 9, 2020

Published in EU Observer

‘The ruling by the Karlsruhe-based top court (…) ques-tions the independence of EU institutions, and creates a risky precedent by dismissing an earlier ruling by the EU's top court. It could also embolden populists, and na-tionalist governments in Poland and Hungary, which ha-ve railed against EU legal supremacy. On the economic front, the German ruling deals a blow to the so-called Pu-blic Sector Purchase Programme (PSPP), that has kept the eurozone's economy aoat during subsequent cri-ses’.

German court questions bond-buying and EU legal regime

Published in Die Zeit

Karlsruhe ‘ignores a ruling by the European Court of Justice’. The German newspaper highlights that the ti-ming of the BVerfG’s ruling is tricky, as the eurozone is in a state of shock due to the serious impact on the eco-nomy during the corona pandemic, as a reaction to which the ECB has increased its current purchase pro-grammes by an additional 120 billion euros by the end of 2020.

Kauf von Staatsanleihen durch EZB teils verfassungswidrig

Published in Frankfurter Allgemeine

The German newspaper Frankfurter Allgemeine stres-sed that ‘the judges in Karlsruhe have for the rst time refused to follow their Luxembourg colleagues’. Reca-lling that ‘the guardian of the European treaties is the Eu-ropean Court of Justice and nobody else’, it is claimed that ‘the Federal Constitutional Court does not see it any differently’.

Auf dem Höhepunkt des ArgwohnsPublished in Il corriere della sera

Describing the German judgment as an 'unprecedented clash', the Italian journal points out its potential conse-quences at a time when everything is at stake: the ability of the ECB to act in times of crisis, the power of the EU institutions to prevail over those of the strongest Mem-ber States and, in the long run, the system's resistance to a pandemic and a dramatic recession.

BCE e Germania: perché tocca all’Italia difendere l’Europa

Published in Le Monde

The French journal Le Monde announces that the judg-ment of the BVerfG, which ‘has placed a legal time-bomb on the very foundations of the eurozone’, will cause ‘a profound legal, economic, and political fa-llout’.

La Banque centrale européenne mise sous pression par la Cour constitu-tionnelle allemande

Published in Le Quotidien

The Luxembourgish newspaper Le Quotidien high-lights that, ‘a decision of rare virulence’, the German judges ‘refuse to abide by the opinion of the Court of Jus-tice’ and that they deemed the Weiss judgment as ‘in-comprehensible’.

Ultimatum de la justice allemande à la BCE

https://euobserver.com/economic/148266

https://www.zeit.de/wirtschaft/2020-05/bundesverfassungsgericht-ezb-anleiheprogramm-teils-verfassungswidrig

https://m.faz.net/aktuell/politik/inland/ezb-urteil-auf-dem-hoehepunkt-des-argwohns-16755836.amp.html?GEPC=s9&premium=0xc7a20ac6a6dfefe97b4cc0a0693a5b73&__twitter_impression=true

https://www.corriere.it/economia/finanza/20_maggio_06/bce-germania-perche-tocca-all-italia-difendere-l-europa-0fcb861e-8f5f-11ea-bb7f-d3d655d2211a.shtml

https://www.lemonde.fr/economie/article/2020/05/06/la-cour-constitutionnelle-allemande-critique-le-manque-de-supervision-de-la-banque-centrale-europeenne_6038788_3234.html

https://lequotidien.lu/economie/ultimatum-de-la-justice-allemande-a-la-bce/

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weekend edition


Nº16 · MAY 9, 2020

Published in Politico

‘Germany decides. That is the message the country's Constitutional Court sent to the European Union’. ‘At a time of growing tension in the EU over German reluc-tance to embrace ambitious plans to resuscitate sout-hern European economies hit hardest by the coronavi-rus by issuing mutualized debt (…), the court's decision risks inaming anti-German sentiment’.

German court lays down EU law

Published in The Financial Times

The Financial Times labelled the BVerfG ruling as ‘an explosive judgment on the legality of ECB bond-buying, setting off what could be years of legal challen-ges against the EU’s highest court’. According to the Bri-tish newspaper, the position of the German constitutio-nal court ‘has the potential to unleash a constitutional crisis in the EU’s biggest member state and with it the en-tire eurozone’, as it raises questions on ‘the rulings of the EU’s highest court in Luxembourg’.

What next in Karlsruhe vs ECB? Ger-man constitutional court blows open questions about ECB independence and the supremacy of EU law

Published in The Guardian

The ‘bombshell ruling’ of the BVerfG may ‘undermine the ECB’s authority to ward off the nancial crisis and spell the end of quantitative easing’. It is noted that after the release of the judgment ‘the euro dropped 0.7% to $1.0829 and was set for its biggest daily slide in more than a month’.

Jolt to eurozone as German court warns against central bank stimulus

Published in The New York Times

The judgment of the BVerfG ‘challenges the supremacy of the Luxembourg-based European Court of Justice and sets a precedent for future challenges by Euroscep-tics across the bloc’. It was highlighted that ‘the right of the ECJ to dene where EU law is supreme was a princi-ple that even Britain broadly accepted before its exit’.

Our Way or No Way? German ECB Ru-ling Rocks EU Foundations

Published in The Telegraph

According to The Telegraph, the BVerfG’s ruling ‘threa-tens to undermine condence in the euro and kills off any hope of eurobonds or joint debt issuance’ marking ‘an epic clash of rival judicial supremacy’.

Germany’s top court clashes with Euro-pean Central Bank in revolutionary ru-ling


https://www.politico.eu/article/german-court-lays-down-eu-law/

https://www.ft.com/content/db720dde-19e8-4e9c-bbfb-b4d48db71a6c

https://www.theguardian.com/business/2020/may/05/jolt-to-eurozone-as-german-court-warns-against-central-bank-stimulus

https://www.nytimes.com/reuters/2020/05/06/world/europe/06reuters-ecb-policy-germany-eu-analysis.html?searchResultPosition=4

https://www.telegraph.co.uk/business/2020/05/05/germanys-top-court-clashes-european-central-bank-revolutionary/

29

News HighlightsWeek 4-8 May 2020

weekend edition


Nº16 · MAY 9, 2020


Monday 4 May

The EU published Commission Delegated Regulation 2020/592, which allows derogations, under temporary and exceptional circumstances, from EU CAP Regula-tion 1308/2013, in order to address the market distur-bances in the fruit, vegetables, and wine sectors, caused by the COVID-19 pandemic.

EU measure addressing COVID-19 mar-ket disturbances in food, vegetables and wine sectors

Monday 4 May

In Air Nostrum (C-191/19), the Court held that the Air Passenger Rights Regulation 261/2004 does not entitle a passenger to compensation when despite having a re-servation on a ight, the reservation is changed against the passenger’s will, and where that means that the pas-senger cannot board the rst of his or her reserved ight, despite it going ahead as planned, and where the passen-ger has been given a seat on a later ight which allows the second of the reserved ights to be boarded, with the nal result that the passenger can reach the nal destina-tion at the arrival time originally scheduled.

Court of Justice rules passengers not en-titled to compensation if they have been denied boarding to the first con-necting flight when they have arrived at the final destination on time

READ MORE ON EU LAW LIVE


Tuesday 5 May

The European Commission published its Annual Report on EU ‘trade defence’ or market-protection measures, entitled the ‘EU’s Anti-Dumping, Anti-Subsidy and Sa-feguard activities and the Use of trade defence instru-ments by Third Countries targeting the EU in 2019’. The report goes into detail about, inter alia, the various investigations and cases before EU Courts opened in 2019 concerning trade defence instruments.

EU Trade – protecting the EU market: 38th Annual Report from the Commis-sion


Tuesday 5 May

For the rst time in its history, the German Federal Cons-titutional Court declared a judgment of the Court of Jus-tice (C-493/17, Weiss and Others), and Decisions of the European Central Bank, ultra vires and not applicable in Germany (BVerfG, Judgment of the Second Senate of 5 May 2020 – 2 BvR 859/15). The German Court found the Court of Justice’s ruling to be arbitrary due to its lack of reasoning in its proportionality assessment and the poor standard of review employed.

German Constitutional Court rules the Court of Justice’s Weiss judgment ultra vires due to poor reasoning and weak standard of review


https://eulawlive.com/eu-measure-addressing-covid-19-market-disturbances-in-food-vegetables-and-wine-sectors/

https://eulawlive.com/court-of-justice-rules-passengers-not-entitled-to-compensation-if-they-have-been-denied-boarding-to-the-first-connecting-flight-when-they-have-arrived-at-the-final-destination-on-time/

https://eulawlive.com/eu-trade-protecting-the-eu-market-38th-annual-report-from-the-commission/

https://eulawlive.com/german-constitutional-court-rules-the-court-of-justices-weiss-judgment-ultra-vires-due-to-poor-reasoning-and-weak-standard-of-review/


weekend edition


Tuesday 5 May

Advocate General Hogan has delivered his Opinion in Veselības ministrija (C-243/19), advising the Court of Justice to rule that, under certain circumstances, Mem-ber States may refuse to take patient’s religious beliefs into account when it comes to the reimbursement of cross-border medical expenses incurred into due to reli-gious reasons.

Reimbursement of cross-border medi-cal expenses incurred on religious grounds: AG Hogan’s Opinion

Tuesday 5 May

In his Opinion in DenizBank (C-287/19), Advocate Ge-neral Campos Sánchez-Bordona advised the Court of Justice to rule inter alia that near-eld communication (NFC) functionality of certain payment cards must be classied as a payment instrument within the meaning of Article 4(14) of the Payments Service Directive.

How to apply the Payment Services Di-rective to NFC functionality of payment cards: AG Campos Sánchez-Bordona’s OpinionREAD MORE ON EU LAW LIVE


Nº16 · MAY 9, 2020

Tuesday 5 May

An international conference took place in a digital for-mat to commemorate the 70th anniversary of the Euro-pean Convention of Human Rights, with the participa-tion of the President of the European Court of Human Rights and of many members of the Council of Europe.

European Conference on the occasion of the 70th Anniversary of the European Convention of Human Rights

By Anjum Shabbir

The European Network of Councils for the Judiciary has proposed the expulsion of the Polish Judicial Coun-cil, supported publicly by the European Association of Judges, in the culmination of many warnings about the impact of ‘reforms’ on the independence of the judiciary in Poland and rule of law. The Polish Judicial Council has the opportunity to respond to the proposal before the ENCJ takes its decision.

Judges’ Associations in Europe pushed to the edge: proposal to expel Polish Ju-dicial Council from the European Net-work of Councils for the JudiciaryREAD MORE ON EU LAW LIVE


Wednesday 6 May

The Opinion of Advocate General Pitruzella in EUIPO v John Mills Ltd, delivered on 30 April last week, advi-ses the Court to set aside the judgment under appeal (Ge-neral Court ruling in T-7/17), the AG nding in favour of the EUIPO as appellant, and advises the Court to an-nul the First Board of Appeal’s trademark registration re-fusal decision of 5 October 2016 in that case.

AG Pitruzzella provides a detailed Opi-nion on interpretation of Article 8(3) of Trademark Regulation and advises CJEU to set aside judgment under appeal

Wednesday 6 May

In Kövesi v. Romania (application no. 3594/19), a case concerning the removal of the applicant as the chief pro-secutor of the National Anti-corruption Directorate befo-re the end of her second term following her criticism of legislative reforms in the area of corruption, the ECtHR found a breach of Article 10 ECHR. It also declared that the right to a fair trial in Article 6(1) ECHR was brea-ched due to the impossibility for the applicant to effecti-vely challenge the removal decision before domestic courts.

ECtHR: Dismissal of Romanian Chief Anti-corruption Prosecutor for criti-cism against legislative reforms brea-ched freedom of expression and right to a fair trial

READ MORE ON EU LAW LIVE READ MORE ON EU LAW LIVE

https://eulawlive.com/reimbursement-of-cross-border-medical-expenses-incurred-on-religious-grounds-ag-hogans-opinion/

https://eulawlive.com/how-to-apply-the-payment-services-directive-to-nfc-functionality-of-payment-cards-ag-campos-sanchez-bordonas-opinion/

https://eulawlive.com/european-conference-on-the-occasion-of-the-70th-anniversary-of-the-european-convention-of-human-rights/

https://eulawlive.com/judges-associations-in-europe-pushed-to-the-edge-proposal-to-expel-polish-judicial-council-from-the-european-network-of-councils-for-the-judiciary-by-anjum-shabbir/

https://eulawlive.com/ag-pitruzella-provides-detailed-opinion-on-interpretation-of-article-83-of-trademark-regulation-and-advises-cjeu-to-set-aside-judgment-under-appeal-in-euipo-v-john-mills-ltd/

https://eulawlive.com/ecthr-dismissal-of-romanian-chief-anti-corruption-prosecutor-for-criticism-against-legislative-reforms-breached-freedom-of-expression-and-right-to-a-fair-trial/

31

weekend edition


By Dolores Utrilla

An agreement for the termination of intra-EU bilateral investment treaties (BITs) was signed by 23 of the EU Member States. Once in force, it will terminate existing intra-EU BITs between the signatory States, including their sunset clauses. The agreement also sets out that ar-bitration clauses shall not serve as legal basis for new ar-bitration proceedings and regulates how to deal with new, pending and concluded arbitration proceedings, with only a few transitional measures.

Termination Agreement for intra-EU bi-lateral investment treaties

The European Chemicals Agency published new infor-mation about extensions to companies’ deadlines, ap-plied due to the COVID-19 crisis. It extended a number of deadlines until the end of May 2020, and has infor-med the relevant companies directly.

European Chemicals Agency: Deadli-nes

READ MORE ON EU LAW LIVE READ MORE ON EU LAW LIVE

Nº16 · MAY 9, 2020

Thursday 7 May

The Court of Justice gave its judgment in Rina (C-641/18), a dispute about whether the Italian courts have jurisdiction in a negligence case concerning victims of a sinking vessel sailing under the ag of Panama (and not an EU Member State) and seeking damages. It ruled that the case can in fact be litigated, against the Italian orga-nisations which classied and certied that vessel, befo-re the Italian Courts.

Italian courts have jurisdiction in ne-gligence case concerning sinking of ves-sel under Panama flag under certain conditions: Court of Justice

Thursday 7 May

The argument in a case led before the General Court a few weeks ago is that all UK citizens who had EU citi-zenship on 31 January 2020 retain that citizenship not-withstanding the UK’s departure from the EU. If suc-cessful, UK citizens would retain their rights as EU citi-zens; for example the right to live and work in EU Mem-ber States.

UK nationals argue EU Citizenship is a Permanent Status and file case against the Council of the EU: case pending be-fore the General Court



Thursday 7 May

Publication was made of a Commission decision appro-ving a Polish COVID-19 State aid scheme in the form of repayable advances for micro, small and medium-sized enterprises. It species that the beneciaries of the sche-me must reside, for tax purposes, in the European Eco-nomic Area, and that they cannot have tax residence in so-called ‘tax havens’ on the EU Council’s list of non-cooperating countries for tax purposes.

No COVID-19 State aid for companies in tax havens Thursday 7 May

Advocate General Hogan delivered his Opinion in Aus-tria v Commission (C-594/18 P), advising the Court to rule that the Euratom Treaty covers the building of furt-her nuclear power plants and the replacement and mo-dernisation of ageing plants by more modern, already de-veloped technologies, for the purposes of State aid justi-cation.

Ag’s Opinion in Austria v Commis-sion: State aid for nuclear power deve-lopment can be authorised under TFEU




Wednesday 6 May

https://eulawlive.com/termination-agreement-for-intra-eu-bilateral-investment-treaties/

https://eulawlive.com/european-chemicals-agency-deadlines/

https://eulawlive.com/italian-courts-have-jurisdiction-in-negligence-case-concerning-sinking-of-vessel-under-panama-flag-under-certain-conditions-court-of-justice/

https://eulawlive.com/uk-nationals-argue-eu-citizenship-is-a-permanent-status-and-file-case-against-the-council-of-the-eu-case-pending-before-the-general-court/

https://eulawlive.com/no-covid-19-state-aid-for-companies-in-tax-havens/

https://eulawlive.com/ags-opinion-in-austria-v-commission-state-aid-for-nuclear-power-development-can-be-authorised-under-tfeu/

32

weekend edition


Thursday 7 May

In Vardosanidze v. Georgia (no. 43881/10), the Euro-pean Court of Human Rights dismissed the alleged breach of the right to life in Article 2 ECHR due to the State’s inaction regarding a widespread problem of poi-soning from carbon monoxide, insofar as the victim was aware of the risks of his water installation and nonethe-less decided to keep using it.

ECtHR: Positive obligation to protect right to life against dangerous activi-ties not triggered if victims were infor-med of the risks

The European Court of Human Rights (ECtHR) has han-ded down its judgment in Khadija Ismayilova v. Azer-baijan (no. 3). The Court found a breach of the ECHR be-cause of the respondent State’s failure to full its positi-ve obligations arising from the right to respect for priva-te or family life, which involve the adoption of measu-res designed to secure respect for private and family life even in the sphere of the relations of individuals bet-ween themselves.

Strasbourg rules that failure to protect privacy rights in relations among indi-viduals breached Article 8 ECHR



Nº16 · MAY 9, 2020

Friday 8 May

The Commission published an Action Plan for a new sin-gle EU Anti-Money Laundering System, considering that it is necessary to close loopholes that exist as a re-sult of divergent national approaches and can as a result be exploited, by creating an EU-level system.

Newly announced measures from the Commission: money laundering and te-rrorist financing

Friday 8 May

In its judgment in C-547/18, Dong Yang Electronics, the Court of Justice found that Article 44 of the VAT Direc-tive 2006/112, along with Articles 11(1) and 22(1) of the VAT Implementing Regulation 282/2011, do not mean that a provider of services can infer that a company has a subsidiary in a Member State’s territory, where a xed establishment is in a Member State and belongs to a com-pany established in a non-Member State (in this case, South Korea). That provider is not required to inquire, for the purposes of such an assessment, into the contrac-tual relations between the two entities.

Court of Justice clarifies the place of supply of services, how to determine ‘fi-xed establishment’, and determine where VAT is to be paid in Dong Yang Electronics



Friday 8 May

In his Opinion in appeal case C-132/19 P, Advocate Ge-neral Pitruzzella suggested the Court of Justice rule that the General Court did not fail to state reasons, nor did it conduct an incomplete examination of the facts in the judgment under appeal, but that it erred in law because it did not declare that the Commission had failed to take proper account of the interests of third parties (such as Canal +) in the competition law proceedings in ques-tion.

Advocate General Pitruzzella’s Opinion in competition appeal case Groupe Ca-nal + v Commission

Friday 8 May

Communication Guidance to Member States was pu-blished to help address the shortages of health workers created by the COVID-19 pandemic, in particular on how the recognition of health workers’ professional qua-lications under the Professional Qualications Direc-tive can be interpreted exibly so the process can be sped up.

Shortage of health workers and recog-nition of professional qualifications: Commission Guidance



Thursday 7 May


https://eulawlive.com/ecthr-positive-obligation-to-protect-right-to-life-against-dangerous-activities-not-triggered-if-victims-were-informed-of-the-risks/

https://eulawlive.com/strasbourg-rules-that-failure-to-protect-privacy-rights-in-relations-among-individuals-breached-article-8-echr/

https://eulawlive.com/newly-announced-measures-from-the-commission-money-laundering-and-terrorist-financing/

https://eulawlive.com/court-of-justice-clarifies-the-place-of-supply-of-services-how-to-determine-fixed-establishment-and-determine-where-vat-is-to-be-paid-in-dong-yang-electronics/

https://eulawlive.com/advocate-general-pitruzzellas-opinion-in-competition-appeal-case-groupe-canal-v-commission/

https://eulawlive.com/shortage-of-health-workers-and-recognition-of-professional-qualifications-commission-guidance/

33

Analyses & Op-Eds

weekend edition


Nº16 · MAY 9, 2020


By Anna Nowak-Salles

Analysis of the Court of Justice’s judgment in Nelson Antunes (C-627/18), a ruling amounting to the neces-sary corollary of the peculiarity of EU State aid law, whe-re the sanction is borne not by the State that grants ille-gal aid, but by the undertaking that receives it.

Case C-627/18 and the burden on the aid beneficiary to make the deterrence from granting illegal State aid work

By Araceli Turmo

Analysis of the judgment of the Court of Justice in Igpour v Commission (C-560 18 P), which restricts the normative scope of the ClientEarth precedent (C-57/16 P), where it was ruled that an NGO retained an interest in bringing proceedings for the annulment of the deci-sions refusing to grant it access to documents related to a legislative initiative, even after it had obtained them.

Reaffirming the Importance of the Inte-rest in Bringing Proceedings in Access to Documents Cases: Igpour v Commis-sionREAD MORE ON EU LAW LIVE


By Sandra Mantu

In this Op-Ed, the author argues that EU citizenship has made its presence felt especially through the right to free movement and the distinctive form of mobility that it champions, centred around the citizen’s right to move and the State’s diminished capacity to refuse entry and terminate residence rights. In this current context, whe-re free movement is for most of us illusory, is there any-thing left of EU citizenship?

EU citizenship and Covid-19: a crisis of citizenship?!

By Dolores Utrilla

Editorial Opinion on the meaning and implications of the ECtHR’s Grand Chamber inadmissibility decision in M.N. and Others v. Belgium (application no. 3599/18). The author argues that, by refusing the appli-cability of the European Convention of Human Rights (ECHR) to persons in embassies and consulates of the States parties to it, this decision contributes to the fading out of possibilities for progress in the regulation of hu-manitarian visas in Europe.

A step backwards for European huma-nitarian visas: The ECtHR’s decision in M.N. and Others v. Belgium



By Edoardo Stoppioni

This Op-Ed contextualises the Agreement for the termi-nation of bilateral investment treaties between the Mem-ber States of the EU by placing it in the wider panorama of the interactions between EU law and international in-vestment law. The author reects in particular on two main points: the philosophical background leading to this termination, and the implications of it.

Disentangling clashes of paradigms: Member States reinstate EU law philo-sophy terminating BITs in the internal market


By Fernando Pastor-Merchante

Analysis on the Advocate General’s Opinion in Austria v Commission, a State aid dispute on whether Member States may invoke the promotion of nuclear energy as a legitimate objective for the purposes of Article 107(3)© TFEU and whether, in light of that objective, the measu-res notied to the Commission by the UK were appro-priate, necessary and proportionate.

Advocate General Hogan argues that the Commission may approve State aid for the development of nuclear energy


https://eulawlive.com/analysis-case-c-627-18-and-the-burden-on-the-aid-beneficiary-to-make-the-deterrence-from-granting-illegal-state-aid-work-by-anna-nowak-salles/

https://eulawlive.com/analysis-reaffirming-the-importance-of-the-interest-in-bringing-proceedings-in-access-to-documents-cases-igpour-v-commission-by-araceli-turmo/

https://eulawlive.com/op-ed-eu-citizenship-and-covid-19-a-crisis-of-citizenship-by-sandra-mantu/

https://eulawlive.com/cjeu-ruling-on-the-scope-of-tax-powers-of-member-states-under-the-freedom-of-capital/

https://eulawlive.com/advocate-generals-opinion-on-the-interpretation-of-eu-rules-on-procedures-for-international-protection/

https://eulawlive.com/analysis-advocate-general-hogan-argues-that-the-commission-may-approve-state-aid-for-the-development-of-nuclear-energy-by-fernando-pastor-merchante/

34

weekend edition



European Financial Regulation.Levelling the Cross-Sectoral Playing Field

Library - Book Review By David Ramos Muñoz

VEERLE COLAERT, DANNY BUSCH, THOMAS INCALZA (EDS.) Hart, 2019, 504 pp.

‘This book is both innovative and systematic and it is a collective book’. The book review notes that this publication chooses a major theme, and covers it from begin-ning to end, offering some interdisciplinary views, but noting that it is clearly grounded on legal analysis.

READ ON EU LAW LIVE

Nº16 · MAY 9, 2020

https://eulawlive.com/library/european-financial-regulation-levelling-the-cross-sectoral-playing-field/