Όλα τα μάτια στο Γερμανικό Συνταγματικό Δικαστήριο

The German Constitutional Court, or the Bundesverfassungsgericht, will hold a crucial hearing today and Wednesday: For the third time, it’ll consider whether or not the European Central Bank acted within the scope of its mandate with its latest bond buying program, called PSPP, which ran between 2015 and 2018 and was worth some €2.6 trillion (that’s 12 zeros).

The crucial questions: Is the ECB’s program monetary, or economic, policy? Does the ECB’s independence mean it can do whatever it wants (or “whatever it takes,” to use ECB President Mario Draghi’s famous words from 2012)? And who could possibly show the bank the limits of its mandate? The German Constitutional Court reckons it can, if all else fails (meaning if it concludes the European Court of Justice didn’t).

The dilemma: The German judges had referred their questions to the ECJ, which has already delivered its ruling — it established in principle that it has the final say over the ECB’s mandate, and said it has less of a problem with the purchasing programs than its German colleagues did. Now the German Constitutional Court is deciding whether to accept the ruling from Luxembourg, or to say “Nein” — via the nuclear option of declaring the ECJ acted ultra vires, or beyond its competence.

That would spell trouble, as it would in practice mean the Bundesbank couldn’t really participate in the euro system, which isn’t a reassuring prospect for those who hold the monetary union dear. But is the PSPP a good trigger for such an emergency brake? Is a program that’s finished an emergency? Can the judges conclude the program was an incentive for governments to accumulate debt, knowing that ECB would buy their bonds — when the overall debt level is down in the eurozone as well as in most countries?

The ruling is expected in a few months. But the mere existence of the court’s ultra vires threat, and the fact that any further step towards integration of the monetary union will end up being challenged in the Bundesverfassungsgericht, is what makes German finance ministers, plus the Dutch and Finns for that matter, toss and turn at night.

THERE’S ALSO A BIG RULING DUE TODAY. It’s to do with a separate case brought forward by largely the same group of plaintiffs, on whether the conferral of banking supervision onto the ECB in 2013 and subsequently the establishment of the Single Resolution Fund harmed the German Bundestag’s sovereign budgetary rights.

The German court announced it would be issuing a fully fledged ruling — so a possible referral to the ECJ seems unlikely. The court has previously made clear it won’t look into the governance of the banking union but solely into whether the legal bases are sufficiently sound to share the sovereignty to supervise, or even shut down, banks across the eurozone, with other members of the euro.