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German Judges Strike Back, Say ECB Isn’t Master of Universe

Bloomberg logo Bloomberg 5/12/2020 Karin Matussek and Stephanie Bodoni

(Bloomberg) -- Members of Germany’s top court continued to defend their controversial decision that questioned the underpinning of the European Central Bank’s asset repurchase program, saying national courts do have a limited oversight role over the bloc’s judges.

Peter Huber, who drafted last week’s ruling for Germany’s constitutional court, said the judges wanted the ECB to take responsibility for the quantitative easing program and to explain it to those negatively affected. In another newspaper interview, his colleague Andreas Vosskuhle denied that the EU top court always has the last word in matters of the region’s law.

“The message to the ECB is actually homeopathic,” Huber, 61, said Tuesday in Sueddeutsche Zeitung. “It shouldn’t see itself as the ‘Master of the Universe.’ An institution like the ECB, which is only thinly legitimized democratically, is only acceptable if it strictly adheres to the responsibilities assigned to it.”

The landmark May 5 German court decision said that the ECB is violating EU law by failing to properly justify its bond purchases program. The ruling risks opening a legal can of worms, as it challenged the supremacy of EU judges, whose rulings are binding across the 27-nation bloc.

The court accused its EU counterpart in Luxembourg of overstepping its powers when it backed the ECB’s monetary policy. That poses the risk of other nations starting to doubt the authority of the EU Court of Justice, an issue that may eventually threaten the future of the EU and its common currency.

The 7-to-1 decision, which goes against a 2018 ruling by the EU Court of Justice that upheld quantitative easing, opens a rift between the regional and national courts. EU officials are even considering suing Germany over the ruling.

“The best would be to calm down and to consider whether our ruling in the end does make some right points,” Huber said.

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The German “ruling is good for Europe because it strengthens the rule of law,” Vosskuhle, the tribunal’s president, told Die Zeit.

Many national constitutional courts have held that they “may and are obliged to step in the rare exceptional cases when EU institutions gravely transgress their powers.”

Huber said the German court only wants proof that ECB’s quantitative easing program is within its mandate. The central bank must show that it hasn’t overstepped its powers, as it doesn’t have the right to transgress its mandate just because Europe is in a crisis, he said.

An ECB spokesman declined to comment.

Vosskuhle and Huber are the architects of the ruling. While they come from different political backgrounds -- Vosskuhle a liberal, Huber a conservative -- they agree very much on how the power should be balanced between national and EU institutions. They were instrumental in orchestrating the majority on the panel consisting of eight judges.

The idea that national courts must police EU institutions if the EU top court fails to do so dates back to the early 1970s. In a long line of cases, the German constitutional court, which is very influential, developed it further.

Vosskuhle and Huber were key in many cases over EU integration, which yielded countless “yes, but” rulings, voicing strong criticism of some EU policies but always stopping short of ruling against them. Until last week.

The 56-year-old Vosskuhle, whose term formally ended the day after the ECB judgment was delivered, called the ruling a “contribution to the dialog” between the courts.

“We see that the judgment worries a lot of people and we’re not happy about that,” said Vosskuhle, who will remain on the bench until a successor is appointed. “But we are bound by law and justice.”

While rulings of the ECJ are binding on member states, the institution depends largely on national courts to enforce its decisions. Even if they disagree, national courts eventually comply or in rare cases, the EU court has changed tack. It’s the first time the top court in Germany -- arguably the bloc’s most important member -- failed to follow the EU tribunal’s ruling.

Direct Challenge

“This is a direct challenge to the core authority of the ECJ, in a context where Poland and Hungary are also under scrutiny of the court for their various infringements to the principle of the rule of law,” said Sebastien Platon, a professor of public law at the University of Bordeaux. “Rejecting that is rejecting the very purpose of this court.”

Unlike Poland or Hungary, the German judges don’t want to stop the EU top court from its oversight of the region’s institutions, Huber said.

“We got a lot of applause from the wrong side,” said Huber, referring to comments by Poland’s government lauding the German ruling.

The German judges accept the role of the bloc’s top court and will only intervene in exceptional cases, Huber said.

“We want the EU top court to do its job better,” the judge said.

(Updates with information in the judges’ role in ninth paragraph.)

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