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EU judges slam top German court ruling

May 8, 2020

The German Constitutional Court and the European Court of Justice are in a bitter fight over jurisdiction. The German court is accused of overstepping the mark in a controversial ruling on a European bond-buying program.

A statue of the goddess Justitia
Image: picture-alliance/dpa/U. Baumgarten

The highest court in the European Union lashed out on Friday after Germany's top court deemed one of its rulings to be not legally binding.

In a sharp rebuke of the German Constitutional Court (BVerfG), the European Court of Justice (ECJ) asserted that it alone had jurisdiction over the European Central Bank (ECB).

"In order to ensure that EU law is applied uniformly, the Court of Justice (ECJ) alone ... has jurisdiction to rule that an act of an EU institution is contrary to EU law," a statement said.

"Divergences between courts of the member states as to the validity of such acts would indeed be liable to place in jeopardy the unity of the EU legal order and to detract from legal certainty.

"Like other authorities of the member states, national courts are required to ensure that EU law takes full effect. That is the only way of ensuring the equality of member states in the Union they created."

German ruling

The rebuke came after the German court controversially ruled that the ECJ had simply rubber-stamped ECB policy with confusing argumentation.

Read more: Top German court says ECB bond buying scheme partially contravenes the law

The BVerfG upheld several complaints against the ECB's bond purchasing program started in 2015 that was meant to boost the economy and stoke inflation toward closer to 2%. It did not cover newer policies on the coronavirus. It said the program was beyond the mandate of the ECB and said the German central bank must quit the scheme within three months unless the ECB can prove its necessity.

The program is credited with having ended the eurozone debt crisis, however, some critics argue it flooded markets with cheap money and encouraged government overspending.

The German ruling stoked fears that it could be used for anti-EU efforts by the nationalist governments of European Union member states such as Hungary and Poland.

There are also fears the decision could help raise objections to a new bond-buying scheme meant to support Italy, Spain and others from economic ruin due to the coronavirus pandemic.

The policy of buying up government bonds is meant to push private investors towards riskier investments.

aw/sms (AFP, Reuters)

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