Outright Monetary Transactions before the ECJ: In search of the ‘golden mean’

On 14 January 2015 – exactly one year after the German Constitutional Court (GCC) had referred for the first time in its history preliminary questions to the European Court of Justice (ECJ) – Advocate General (AG) Cruz Villalón presented his opinion in the OMT case (Case C-62/14). The case is, in essence, about the legality of the ‘Outright Monetary Transactions’ programme of the ECB (OMT) under EU law. This concerns first of all the question, whether the OMT is covered by the ECB’s monetary policy mandate (Article 127(1) TFEU) or rather amounts to the conduct of economic policy, for which the Union only has a coordinating competence (Article 5(1) TFEU). Moreover, the question has been raised whether the OMT violates the prohibition of monetary financing (Article 123(1) TFEU). In its order for reference the GCC had stated in a rather unusually clear language that the OMT violates the German Basic Law (Grundgesetz) if it was considered in its entirety to be in conformity with EU law. The finding of the unconstitutionality of the OMT would mean that the German central bank (Deutsche Bundesbank) would be prohibited from taking part in a possible future implementation of the OMT. The legal validity of these arguments has been discussed rather controversially (see e.g. the special issue on this topic of the German Law Review).

In its preliminary ruling in due course the ECJ will have to find the ‘golden mean’. On the one hand, it is improbable that the European judges will risk a constitutional conflict with the highest German court by given their unqualified approval of the OMT. On the other hand, not only the unlikely rejection of the OMT in its entirety, but also the imposition of limits on the overall amount of purchases of government bonds could compromise the success of the mere announcement of the OMT in calming the markets and, moreover, provoke a resurgence of the Euro area financial and debt crisis ...

Zum vollständigen Artikel

Cookies helfen bei der Bereitstellung unserer Dienste. Durch die Nutzung erklären Sie sich mit der Cookie-Setzung einverstanden. Mehr OK