German court hands ECB three-month ultimatum.

[L.A.T.1961]

German court hands ECB three-month ultimatum to justify stimulus scheme.

Germany’s top court on Tuesday gave the ECB three months to justify bond purchases under its flagship stimulus programme or lose the Bundesbank as a participant, raising questions about both the scheme and the euro’s future.

https://uk.reuters.com/article/us-ecb-policy-germany/german-court-hands-ecb-three-month-ultimatum-to-justify-stimulus-scheme-idUKKBN22H0XB

https://uk.reuters.com/article/uk-ecb-policy-germany-merkel/merkel-wants-close-examination-of-german-courts-ecb-ruling-party-sources-idUKKBN22H1W7

 

The European Union’s top court faced the most stinging attack in its 68-year history -- not from Brexiteers, but from its German counterpart. In a long-awaited ruling on the European Central Bank’s quantitative easing program, Germany’s constitutional court in Karlsruhe accused the EU Court of Justice of overstepping its powers when it backed the ECB’s controversial policy.

https://www.bloombergquint.com/onweb/eu-court-faces-declaration-of-war-from-germany-s-top-judges

 

Germany's top court has ruled that the European Central Bank's mass bond-buying to stabilise the eurozone partly violates the German constitution.

https://www.bbc.co.uk/news/world-europe-52542993

 

In announcing the ruling, President Andreas Voßkuhle said the EU court had approved a practice that “was obviously not covered” by the ECB’s mandate.

In effect, the German court said it would not honor the EU court decision, an unprecedented step that legal experts say could have far-reaching consequences for Europe’s justice system.

https://www.politico.eu/article/german-high-court-warns-ecb-that-bond-buying-could-be-illegal/

 

[stevewinn]

All this fighting over money all of a sudden. EU members can't decide future budget. Can't decide EU covid rescue budget. And now Germany wants to opt out of ECB when it comes to the ECB buying member state debt bonds. Its like I posted the other day. German realisation it will have to shoulder the great cost if its to fulfil its ambition of a Federalist Union strong armed by Germany. But first they don't want to help those memebers in debt. 

If I didnt know better I'd say the EU has lost a serious amount of money, its almost like a country that's the equivalent of the 19  smallest members has left the union. 

[L.A.T.1961]

I dare say there will be another Brussels fudge to keep things going, but this is potentially a big deal in euro land if Germany stops buying EU bonds automatically. Then there is the prickly problem of EU nations ultimate sovereignty which is being called into question. Sound familiar ....   

Our way or no way? German ECB ruling rocks EU foundations.

"Tuesday’s ruling by Germany’s constitutional court may have been aimed squarely at the European Central Bank’s bond-buying economic stimulus plans. But it also has the potential to shake the very foundations of the European Union itself. Since its founding 1957 Treaty of Rome, European Union has been an unparalleled experiment in national sovereignty-sharing. While members retain a great deal of autonomy, its rules set out where EU law – as interpreted by the ECJ – must hold sway.

Now that notion has been disputed by a court of a founding EU member, which also happens to be its biggest economy and the main contributor to its budgets." 

https://uk.reuters.com/article/uk-ecb-policy-germany-eu-analysis/our-way-or-no-way-german-ecb-ruling-rocks-eu-foundations-idUKKBN22I1PN?rpc=401&

 

[stevewinn]

The German Constitutional Court tries to assert German power over the ECB and the European Court.

In a sweeping judgement the German Court dismissed the judgement of the European Court as a “view”, and gave its own  instead.

At issue is the right of the European central Bank to print billions of Euros, buy up the bonds of member states, and keep interest rates around zero. Many Germans  think this is a very damaging policy, hitting savers and dragging German taxpayers towards responsibility for the debts of other countries with less prudent financial management. Various German interests brought this court case to demand Germany is insulated from the debts of Italy and Greece, and from any inflationary threats were the ECB to overdo the money printing.

At issue is also the powers of the EU Institutions themselves. Elsewhere in the EU – including the UK when we were a member – domestic courts accepted the superiority of the European Court of Justice, and accepted all EU policies and laws emanating from  the Commission, Court and Parliament. The German Court has always tried to maintain a different doctrine, limiting the EU’s powers to the massive range and depth of powers bestowed by Treaty but keeping  open the possibility that there is some power they claim that goes beyond their Treaty entitlements.

The German Court has up to this point found very little and has not been that willing to pursue German powers instead of EU powers, as the German Court generally supports the EU federal scheme. That is what makes this judgement so much more revolutionary, claiming as it does that the ECB and EU has acted ultra vires in such a dismissive judgement.

It is one  thing to say this, and another to turn it into any kind of reality. The detail of the judgement gives the ECB a three month period to show it has used its powers proportionately. Only if the ECB fails to satisfy the German Court and government on that matter will the judgement become a declaration of some independence, and only then will the ECB have to change its bond buying policy to avoid schism.

Maybe this German judgement will turn out to be just another “view” in a bitter row about how much money the ECB can print and how much of a free ride it gives to financially weaker countries. It is likely to mean more Euro austerity and smaller increases in bond buying, as the EU moves to head off a more radical declaration of German independence in these economic areas.

John Redwood MP.

[Duke Wellington]

The EU is fundamentally flawed because its member states cannot behave as fully independent entities, and it itself isn't a country. They are stuck in an in between limbo and when outside pressures come along (like the 2008 banking crises, and the Corona Virus crises) its reveals the current setup to be somewhat lacking.

This was always going to happen because its impossible to sustain the EU in its current form. Either it will collapse or become a proper country. Knowing the EUs track record I suspect they will move to becoming a proper country and that is when the problems will start?

Why? Well there are some EU member states where the majority of the population is pro-EU but most of them are anti-EU. So the imposition of EU statehood on them will cause outrage. I think an EU civil war is coming, and I thank God that we are out of it.

But no doubt our island and the US will once again get sucked into sorting it all out.

[+and-then]

36 minutes ago, Cookie Monster said:

But no doubt our island and the US will once again get sucked into sorting it all out.

It may happen that way but I can tell you that this time around a LOT of Americans will be against it due to the way the Europeans have looked down the nose at us for decades.  It's a bit difficult to have sympathy for nations like Germany that are doing business with the main threat to Europe, at least historically.  They may be told to sort it out for themselves this time around.

[L.A.T.1961]

 

It looks like the response from Brussels is to educate the poor misguided Germans  - 

 

Hogan: Brussels will ensure ‘supremacy’ of EU law after German ruling 

The Karlsruhe decision is a serious threat to the principle, enshrined in EU treaties, that EU law and CJEU judgments trump national law.

When asked about this, Hogan said: "The answer to that is Germany are signatory to the European treaties, where the supremacy of European law supersedes national law, and that's the position. The European Commission, as the guardian of the European treaties, will be doing everything to ensure that the European Court of Justice and the legal adjudication of matters at the European level continue to be understood  by every member state that they supersede national law,"

https://www.politico.eu/article/hogan-brussels-will-ensure-supremacy-of-eu-law-after-german-ruling/

 

Brussels like educating folks who fail to tow the line - 

Brexit: UK to be 'educated' about consequences, says Barnier - "Brexit negotiator has said he sees the process as an opportunity to "teach" the British people and others what leaving the single market means." 

https://www.bbc.co.uk/news/uk-politics-41140564

 

[stevewinn]

It's all going well. Poor Barnier failing. Send him home to tell them he's failed to teach the British a lesson. Oh. And he's lost them access to British fishing grounds. And failed to tie us in to EU institutions. Leaving the EU wide open for Britain to be competitive. In short total failure for the EU. How long before he mentions the Irish border. E

It's one crisis after another for them. Can't decide budgets. Virus crisis. Monetary crisis, German in the courts.