The euro must have more weight internationally

The Chancellor expresses understanding for the ECB – and explains how the EU governments should react to the decision of the Constitutional Court.

Angela Merkel this Wednesday in the Bundestag.

Bund-Chancellor Angela Merkel demonstratively supported the European Central Bank after the ruling by the Federal Constitutional Court on the ECB’s bond purchases. The ECB is in a “field of tension”, said Merkel on Wednesday in the Bundestag, indicating an understanding of the central bank’s actions: on the one hand, there are the European treaties, on the other hand, the ECB must prove itself in concert with other central banks.

Merkel said that she respected the ruling from Karlsruhe, but had an interest in the euro “also having global weight – more weight (…) than less”. To do this, the ECB must be able to play its international role.

Now it is important to find a clever solution so that the Bundesbank can continue to take part in the ECB’s bond purchases. “The point is that we act responsibly and so wisely that the euro can, should and will continue to exist,” emphasized the Chancellor. It also assigned the EU governments the responsibility to relieve the ECB in the future. The EU states would now have to pursue such a strong economic policy with the discussed EU reconstruction fund that the ECB is no longer so much in demand.

“Have not progressed sufficiently”

The Karlsruhe constitutional judges had classified the extensive purchases of government bonds of the euro countries by the ECB and the national central banks as partially unconstitutional. They asked the Governing Council to explain whether and how the purchase program was proportionate.

Otherwise, the Bundesbank is prohibited from participating in the purchases after a transition period of three months. The judges stood against the European Court of Justice (ECJ), which at the end of 2018 came to the conclusion that the purchases were covered by EU law.

Merkel sees the Karlsruhe ruling as an opportunity for greater political integration in the euro zone. This has been the goal of monetary union from the start, “but we have not made sufficient progress,” she said. It is now a matter of reacting to the judgment of the Karlsruhe judges with a “clear political compass”. Changes to the European treaties should not be taboo.

The outgoing President of the Federal Constitutional Court, Andreas Vosskuhle, defended the judgment. “We firmly believe that this decision is a good decision for Europe because it strengthens the bond with the law. That will show in the medium and long term, ”he told the weekly newspaper“ Die Zeit ”.

Constitutional courts are legitimized and obliged to intervene in exceptional cases in the case of particularly serious violations of competencies by the European institutions. Vosskuehle’s colleague from Karlsruhe, Peter Huber, described the judgment in an interview with the FAZ as “imperative.”

In the European institutions, on the other hand, the verdict aroused primarily incomprehension and indignation. The European Court of Justice (ECJ) pointed out that it was solely responsible for questions of an EU law violation by European institutions.

Finland’s central bank chief Olli Rehn warned against violating the precedence of the ECJ over the national constitutional courts. That would have very negative consequences for the EU, he said in the Finnish parliament. The EU Commission does not rule out infringement proceedings against Germany. According to the EU treaties, it can initiate legal steps in the form of proceedings against EU countries that do not implement EU law.

From the point of view of constitutional judge Huber, however, this would exacerbate the conflict. As a consequence, there is a threat of “a considerable escalation that could plunge Germany and other member states into a constitutional conflict that is difficult to resolve,” said Huber. The unrestricted primacy of Union law is not compatible with the guarantee of eternity in the Basic Law and many other constitutions. “In the long run that would weaken or endanger the European Union,” he warned.