No p***ing. Building not as stable as it looks.

ECB hauled before Karlsruhe court

Starting on June 11, the German Constitutional Court will examine whether the European Central Bank exceeded its powers by creating the European Stability Mechanism (ESM). Once again the eurozone is waiting with bated breath for another decision in Karlsruhe.

Published on 12 June 2013 at 16:14
No p***ing. Building not as stable as it looks.

On trial are the ECB’s bond purchases of over-indebted euro-zone countries. Can the Central Bank really buy unlimited bonds of the malefactor states to save the euro, as ECB President Draghi announced ("whatever it takes")? Were the bank’s actions in pursuit of monetary policy, or in pursuit of the prohibited funding of states, the opinion of Bundesbank President Weidmann?

In fact, the ECB is beyond the jurisdiction of the German Constitutional Court. After all, European institutions may act only if they are authorised by the member states to do so. The Constitutional Court could decide that the ECB is exceeding its competencies in buying up bonds of individual eurozone countries in a “legal act that does not respect the limits of the EU’s legal powers”, for which it is mainly the German taxpayer that is liable – and this without any parliamentary authorisation, and without even asking the Bundestag.

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Counterpoint

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German litigation, European consequences

For the editor of Tageszeitung, the case brought against the European Central Bank (ECB) should be tried before the European Court of Justice in Luxembourg, and not in Karlsruhe, the home of Germany’s Constitutional Court –

Imagine that a Frenchman – let’s call him Mr Dupont – disagrees on European policy with another Frenchman – Mr Picon – before a French court. [...] and that the fate of the whole of the Eurozone depends on the outcome.

What would we call it? [...] A theatre of the absurd, a French farce, probably. But this is precisely the scene playing out [at the moment] before the German Federal Constitutional Court in Karlsruhe. In real life, Mr Dupont is the head of the Bundesbank, [Jens] Weidmann; Mr Picon is [Jörg] Asmussen, from the ECB.

Indignant, the leftist German newspaper continues in its ironic tack, not without some highlighting some concerns over the consequences of the decision in Karlsruhe –

If Dupont – pardon, Weidmann – wins, the [...] ECB’s bond-buying programme could be shut down. The wave of speculation against the euro that the head of the ECB, Mario Draghi, had only managed to quash by threatening to unleash unlimited bond purchases, would start up again. The victims would first be Italy and Spain [...] but France, Belgium and the Netherlands could also be under strong pressure if speculation resurfaced. In Germany, however, the debate is unfolding as if it were only about us – our Constitution, our Parliament and our money.

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