Much has been said, by the way and out of turn, on the judgment made by the Bundesverfassungsgericht (BVG) in Karlsruhe about the Public Sector Purchase Programme (PSPP) of the European Central Bank (ECB), the most known Quantitative Easing (Q.E.) started in 2015 by Mario Draghi.
This programme has reached the economic policy goals adopted by ECB – given the lack of an ambitious actions made the other EU institutions (European Commission, European Council, Council of the Union, Eurogroup) – to bring out the European Union (EU) and the Eurozone from a asymmetric crisis adopting the proportionality principle to the peculiarity of the economic asymmetry.
The decision of Karlsruhe will remain without concrete consequences in the relationship between the BVG and the ECB and the German judges with red togas will stay in their hunger (Sie werden kein Gehoer finden) if we take into account the reactions of the European Commission, the European Parliament and the ECB, the embarrassed silence of the German institutions with the exception of the CSU leader and of Friedrich Merz, the unlikely succession candidate to Angela Merkel.
We know very well that ECB – the only EU institution having a juridical personality – is totally independent in carrying out its duties and that this independence has been underlined by the Treaty of Lisbon more than the Draft Constitution rejecting the clumsy attempt made by the Berlusconi government and its Foreign Affairs Minister Franco Frattini to weak it.
The ECB is more independent than the Bundesbank, even if its system is inspired by the German government, why it is independent without any limit while the Bundesbank is autonomous within the German federal system and not totally independent.
We know very well that the priority of the European System od Central Banks (ESCB) – where ECB is the main element together with the national banks of the EU and not only of Eurozone – is the price stability and that this goal has been necessary when the risk of e general inflation was very high using all the instruments to avoid an inflationist growth.
The ECB, acting with the wisdom of the single authority of the monetary policy, has given up over the years an evolutionary interpretation of this goal when it became clear that the European economic problems were related more and more to the risks and the effects of deflation than the inflation.
In the debates among experts and politicians (sometime inexperienced) reference is often made to the differences between the ECB (and ESCB) from one side and the Federal Reserve on the other side underlying the predominant priority of the ECB for the price stability and the mission of the Federal Reserve to promote growth and full employment.
It could be useful to examine the actions of both and see that the ESCB has used and will use its powers within the treaties (art 282 par 2. TFEU) to “give its support to the general economic policies in the Union and give its contribution to reach the EU goals” (see art. 3 TEU) while the Federal Reserve has given up over the years a new interpretation of its mission founded on the priority about the Stability Price.
Gaining the role of one of the EU institutions in the Treaty of Lisbon (art. 13 TEU), the EBC has to respect the principle of the fair cooperation (art. 4.3 TEU) towards the other institutions but all the EU institutions have to be fair towards the ECB.
We must not overestimate the consequences of the decision made in Karlsruhe on the action of ECB and SEBC while we are sure that the Pandemic Emergency Purchase Programme (PEPP), started by Christine Lagarde to face the effects of the health crisis, will continue following the guidelines adopted – by majority – by the ECB directory in Frankfurt and the proportionality principle will be applied if the consequences of the crisis will be symmetric or if it will became asymmetric.
On the contrary, we must not underestimate the true goal of the judges in Karlsruhe who have targeted Frankfurt (the ECB) to hit Luxembourg (the Court of Justice of the EU) in the framework of a guerrilla started in 1993 with the Maastricht Treaty where the victory has ever been in the hands of the Court and the defeat incurred by the BVG.
The question of the Union law primacy, banned in the Treaty of Lisbon by the opposition of some governments against its “constitutionalising” and replaced by the non-binding “declaration 17” related to the art. 4 TEU, should be confirmed – as it has been the case – by the European Commission and the European Parliament but also by the European Council applying the principle of the fair cooperation with the consequence that we will respect the principle of the rule of law who is an integral part of the idea of the “community” born the 9th of May 1950 with the Schuman Declaration.
Through their guerrilla against the Court of Justice, the German judges are insisting on one incontestable point that is essential for us: the EU isn’t (yet) a federation – even if it contains a few federalist elements as the exclusive monetary power of ECB and ESCB – contrary to the German Fundamental Law in its article 31 and the US Constitution on its article 6.
The question of the Union law primacy, together with the respect of the rule of law, will be one on the main steps of the debate and the conclusions on the future of Europe to ensure the jump from the sui generis community (as it has been defined by the Court of Justice in the Van Gend en Loos decision in 1962) to a Federal Community that is at the centre of the action made by the European Movement.
Pier Virgilio Dastoli
11/05/2020
