The President of the European Commission Ursula von der Leyen said that EU law has “primacy over national law” following a ruling from a German court that the European Central Bank’s bailout scheme was unconstitutional.
President of the European Commission said that “The final word on EU law is always spoken in Luxembourg. Nowhere else”, referring to the location of the European Court of Justice (ECJ).
“The recent ruling of the German Constitutional Court put under the spotlight two issues of the European Union: the euro system and the European legal system,” she said in a statement.
“The European Commission upholds three basic principles: that the Union’s monetary policy is a matter of exclusive competence; that EU law has primacy over national law and that rulings of the European Court of Justice are binding on all national courts,” von der Leyen added.
The EU president also warned that the commission is considering filing “infringement proceedings” against Germany at the ECJ for violating EU law, which could result in large fines being levied against her home country.
Earlier this month, Germany’s Constitutional Court found that the bloc’s bond-buying program, the Public Sector Purchase Program (PSPP), was unconstitutional as it set monetary policy without being properly scrutinised by German lawmakers.
The court said that Germany’s central bank, the Bundesbank — the main financial backer of the project — would be forced to leave the €2.6 trillion scheme after a period of three months if popper justification was not provided to by the ECB.
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Andrew Kenningham of Capital Economics said that the legal challenge will likely not bring the scheme to an end, “but it highlights that a successful legal challenge to its policies in the future could contribute to increased tensions in the bond markets and to a renewed risk of euro-zone break-up.”
“What was different with Germany was that it always made clear the [constitutional] court was prepared to step in and do something about it. This is the first case where a German court says the European court has no jurisdiction,” noted Panos Koutrakos, Professor of European law at London’s City University.
The ruling by the German court could also create a legal framework for challenges against the bloc’s €750 billion scheme to ease economic strains brought on by the Chinese coronavirus, as well as other legal challenges from member states.
Tensions within the bloc have been building during the pandemic, with tensions building over the commission’s response to the virus, with nearly 50 per cent of Italians saying that they would prefer to leave the EU over perceived lack of solidarity during the crisis.
Commenting on Ursula von der Leyen’s attacks on the German court, Brexit Party leader Nigel Farage said that the president is “unknown and irrelevant”, adding that “the EU is crumbling.”
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