La European Commission opened one infringement procedure against Germany. According to Brussels, Berlin would have violated the principle of the primacy of Community law and would not have complied the jurisdiction of the EU Court. The allegations refer to a ruling of May 5, 2020 with which the German Constitutional Court ruled on the legitimacy of one of the Eurotower's securities purchase programs. This is the PSPP (not to be confused with the PEPP, launched to deal with the crisis triggered by the pandemic), which already existed before Covid and which has been helping to keep interest rate differentials low for years, ensuring a homogeneous transmission of monetary policy in the Currency union.
In the disputed ruling, the German Constitutional Court declared "ultra vires" (i.e which is outside the scope of its competence) both the PSPP and a 2018 ruling by the European Court of Justice, which had confirmed the legitimacy of the purchases.
Now, in turn, the Commission believes that with this judgment the judges of Karlsruhe have violated the field of the Community authorities.
In particular, for Brussels the German court "deprived a sentence of the Court of Justice of the EU of its legal effects in Germany, violating the principle of the primacy of EU law".
In addition to underlining the political independence of the ECB, the goal of the EU Commission is reaffirm the precedence of European law over national law. Indeed, the pronouncement of the German Constitutional Court risks creating a dangerous precedent, because it could push other countries to ignore the decisions of the European Court of Justice and therefore Community law.
Meanwhile, between tonight and tomorrow the ECB directorate will meet again, which will have to review the plans for the purchase of securities in the light of new fears about the possible return of inflation.
