Blitzkrieg on EU: Germany slams EU Central Bank and EU Court of Justice
Historic German declarations: 'ECJ has no supremacy in Germany'
'The EU is NOT a country'
© Brexit Facts4EU.Org 2020
ECJ’s decisions “not comprehensible” and “unlawful”, declares Germany’s top court in damning verdict for EU
Tuesday in Karlsruhe (Germany) saw a remarkable event in the turbulent 63-year history of the EEC/EC/EU. The supreme national court of a founder member country of the EU finally declared that which everyone knew, but which has been brushed under the table for decades.
The ramifications of the verdicts handed down by Germany’s Constitutional Court are profoundly political and economic, with potentially disastrous consequences for the EU’s troubled Euro currency, and real questions for the future of the EU as a whole.
The ruling by Germany’s top judges concerns a case which might look complex technically but which Brexit Facts4EU.Org has distilled down for non-technical readers.
This article is important – we’ve made it as short as we can and we really hope you will read it.
We think you will find it’s worth it!
Those who wish to do so, can find the fiscal and monetary aspects of this case described in the financial pages of the newspapers. Here we focus on what this ruling means for the EU’s institutions and its peoples.
What is this all about?
In 2015 a group of Eurosceptic German politicians and campaigners took a case to Germany’s top court, arguing that the European [EU] Central Bank was acting unlawfully in its massive programme of purchasing government bonds to keep the Euro and some Eurozone countries afloat.
They further argued that the German government, the Bundestag (parliament), and the Bundesbank should not play any further part in these allegedly unlawful activities.
The main verdict this week from Germany’s top court? GUILTY – although the judges have given the EU three months to try to come up with what would be, in effect, an appeal.
Brexit Facts4EU.Org Summary
Firstly, the basic financial parts of the story
- In 2015 the EU’s Central Bank (the ECB) started the ‘Expanded Asset Purchase Programme’
- This meant Eurozone central banks buying national governments’ bonds and other debts
- As of November last year it totalled €2.6 TRILLION
- Purpose: to increase money supply, support consumption and investment spending, keep inflation to 2%
- The €2.6 TRILLION was spent in the years from 2015-2019, BEFORE the Coronavirus emergency measures
- This number has rocketed even higher since then
- The German court’s ruling declares the ECB’s actions to be “ultra vires”
- In effect the ECB acted beyond its remit and so its actions were unlawful
It then gets a whole lot worse for the EU
In its decision handed down on Tuesday 05 May 2020 the German Constitutional Court (Bundesverfassungsgericht) did not merely find the European Central Bank guilty, it also attacked the Court of Justice of the EU (CJEU/ECJ) as well as the EU’s institutions and certain fundamental principles of the EU.
It is worth noting that Germany’s Constitutional Court cannot and has never accepted the supremacy of the European Court of Justice, as this would conflict with Germany’s Basic Law (Grundgesetz). This is the law dating from 1949 which was designed to ensure that something like the Nazi regime could never happen again. It is the German parliament which must decide laws and be democratically accountable, and the Bundesverfassungsgericht is there to oversee things.
Brexit Facts4EU.Org Summary
The rest of the story – the attacks on the EU and its institutions
In 2017 the German court asked the ECJ (CJEU) to rule on questions regarding “the prohibition of monetary financing of Member State budgets, the monetary policy mandate of the ECB, and a potential encroachment upon the Members States’ competences and sovereignty in budget matters”.
- 11 Dec 2018: ECJ judged that ECB had NOT exceeded its mandate nor violated the prohibition of monetary financing
- The German court’s verdict? The ECB’s actions “must be qualified as ultra vires [unlawful] acts, despite the CJEU’s judgment to the contrary”
In other words, Germany’s top judges told the EU’s top judges they are plain wrong
Court of Justice of the European Union (CJEU / ECJ) © EU Commission
Below we have selected some key quotations from the extraordinary statement from Germany’s Constitutional Court, to give readers a flavour for how serious this is for the EU.
This kind of language is uncompromising - and damning for the EU.
Brexit Facts4EU.Org Summary
Some selected quotes from the German judges' statement
“even under the Lisbon Treaty, the Member States remain the ‘Masters of the Treaties’ and the EU has not evolved into a federal state.”
In December 2018, the ECJ decided that the ECB’s actions “were still within the ambit of the ECB’s competences”. The German court disagrees in emphatic terms:-
“This view manifestly fails to give consideration to the importance and scope of the principle of proportionality… which applies to the division of competences between the European Union and the Member States – and is simply untenable from a methodological perspective given that it completely disregards the actual economic policy effects of the programme.”
In non-legal jargon, this is Germany’s top court giving the EU’s top court an absolute rocket. Here are some more choice quotes:-
“Therefore, the interpretation of the principle of proportionality undertaken by the CJEU, and the determination of the ECB’s mandate based thereon, exceed the judicial mandate conferred upon the CJEU.”
- “does not satisfy the requirements of a comprehensible review”
- “cannot fulfil its corrective function”
- “renders meaningless the principle”
- “completely disregarding all economic policy effects”
- “It allows the ECB to gradually expand its competences on its own authority”
- “It largely or completely exempts such action on the part of the ECB from judicial review”
- “they amount to an exceeding of the ECB’s competences”
- “the Federal Constitutional Court is not bound by the CJEU’s decision”
“The Member States remain the ‘Masters of the Treaties’
and the EU has not evolved into a federal state”
How does this affect ordinary people’s lives?
We end on something we feel all EU citizens should read – as well as those British politicians and campaigners who are still trying to delay and thwart Brexit.
This shows how this Public Sector Purchase Programme (PSPP) of the European Central Bank (ECB) affects ordinary people. This is our final quote from the German Constitutional Court.
The PSPP “affects the commercial banking sector by transferring large quantities of high-risk government bonds to the balance sheets of the Eurosystem, which significantly improves the economic situation of the relevant banks and increases their credit rating. The economic policy effects of the PSPP furthermore include its economic and social impact on virtually all citizens, who are at least indirectly affected, inter alia as shareholders, tenants, real estate owners, savers or insurance policy holders. For instance, there are considerable losses for private savings. Moreover, as the PSPP lowers general interest rates, it allows economically unviable companies to stay on the market. Finally, the longer the programme continues and the more its total volume increases, the greater the risk that the Eurosystem becomes dependent on Member State politics as it can no longer simply terminate and undo the programme without jeopardising the stability of the monetary union.”
“The Federal Government and the German Bundestag have a duty to take active steps against the PSPP in its current form.”
Well done, if you read this far. We thought this story was important and we reduced it as much as we could.
And what was the EU Commission's reaction to all of this?
“Notwithstanding the analysis of the detail of the German Constitutional Court decision today, we reaffirm the primacy of the EU law, and the fact that the rulings of the European Court of Justice are binding on all national courts.”
Hmm, good luck with that, Ursula von der Leyen.
Tomorrow is VE Day
British Remoaner-Rejoiners have not stopped. They are working behind and in front of the scenes to take Brexit away from us. The EU are equally complicit in this, with a sustained propaganda campaign to ‘delay’ Brexit because of the Coronavirus.
Our report above on the verdict of Germany’s top court shows exactly why the UK must continue on its path to leave the anti-democratic disaster that is the EU and its Transition Period no later than 31 December 2020.
The sooner we are free and independent again, the better. Why would anyone still want to be dragged down by the EU? It’s flagship Euro currency is increasingly looking like an accident waiting to happen.
As we reported on Tuesday, the UK-US trade talks have now started. The UK needs to be talking to the Anglosphere as a whole, as well as to all our other Commonwealth partners and the many other countries around the world who like the UK and hope to increase business with us.
Finally and although it may not look like it, an article such as this, trying to summarise highly complex material into readable form, takes a great deal of time. The Brexit Facts4EU.Org team survives – just – on the generosity of our readers. Without you we could not continue in our fifth year and see this thing through.
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[ Sources: Bundesverfassungsgericht, Karlsruhe ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Thur 07 May 2020
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