Bulletin n. 1-2/2014 | ||
November 2014 | ||
Jürgen Bast |
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Don’t Act Beyond Your Powers: The Perils and Pitfalls of the German Constitutional Court’s Ultra Vires Review | ||
in German Law Journal , vol. 15, issue 2 , 2014 , 167-181 | ||
On 26 July 2012, the European Central Bank (ECB) issued a new currency, the “Draghi.” A country where the Draghi has the status of legal tender must be fabulously wealthy—a single coin gives unlimited purchasing power to its owner. This is one way to characterize ECB President Mario Draghi’s pledge to do “whatever it takes” to save the Euro. It is widely believed that the move prevented the common currency from breaking apart. Yet, the ECB’s resolve caused severe conflict within the European System of Central Banks (ESCB). A few weeks later, when the Governing Council of the ECB formally adopted the Outright Monetary Transactions (OMT) program to pave the way for the implementation of Draghi’s rescue policy, the representative of the German Bundesbank was outvoted. Subsequently—in a maneuver quite unusual among central bankers—he appealed to the public to stir up support for his opposition to the policy. Eighteen months later the Euro is still around, and so is the conflict. Did the ECB exceed its mandate when it expressed its willingness to buy, under certain conditions, government bonds of selected Member States? Meanwhile the conflict has moved on from the central bankers to another famous counter-majoritarian institution, the Bundesverfassungsgericht (German Federal Constitutional Court). In its OMT Case decision of 14 January 2014, the Constitutional Court concurred with the Bundesbank and found the OMT policy to be unlawful. The Court suspended the proceedings and referred the matter to the European Court of Justice (CJEU) for a preliminary ruling on the validity of the ECB’s OMT Decision. In this paper I will discuss the legal context of the Constitutional Court’s first-ever reference to the CJEU. I will particularly focus on the Constitutional Court remedy out of which the referral arose, namely, the ultra vires review (UVR). | ||