Peter
Boehringer
European
Central Bank Loan Purchases
AfD
Kompakt, May 5, 2020
[Peter Boehringer is an Alternative für
Deutschland Bundestag member from Bavaria and is chairman of the Bundestag’s budget
committee. He here comments on a recent decision by the German constitutional
court concerning the European Central Bank’s purchases of state loans. Article
123 of the Treaty on the Functioning of the European Union reads in part: “Overdraft
facilities or any other type of credit facility with the European Central Bank
or with the central banks of the Member States…in favour of Union institutions,
bodies, offices or agencies, central governments, regional, local or other
public authorities, other bodies governed by public law, or public undertakings
of Member States shall be prohibited, as shall the purchase directly from them
by the European Central Bank or national central banks of debt instruments.”]
This is an important
decision. The Federal Constitutional Court hereby confirms the AfD delegation’s
legal interpretation that the ECB for years has acted in ways that exceed its
competence, are counter to the constitution and are irreconcilable with EU
treaty law. At the same time, the court reprimands the Federal government and
the Bundestag for not fulfilling their constitutional mandate to examine the
decisions of the EU Council for their legal compliance. Thus is confirmed by
the highest court what the AfD has argued all along in reference to the rescue
of the euro – and that the Federal government has long since been obliged to
oppose.
With the demand for a
description of proportionality, the Constitutional Court presents the ECB
council with an indissoluble order. The purchase of state loans obviously
serves economic and fiscal policy goals. The mandate of the ECB is however
limited to pure monetary policy. Any attempt to subsequently supply a basis for
the purchase of loans is here condemned to failure.
The Federal Constitutional
Court has today made clear that a continued frustration of the law by the
European High Court will not be accepted. Thereby the [Federal Constitutional] Court
strengthens in welcome ways the nation states in their relation to the EU.
Nevertheless, the judges have avoided determining and censuring the obvious
violation of the ban on monetary state financing by the purchase of loans.
On the basis of this
decision, the AfD now demands:
- The cessation and winding down of the loan purchases of the PSPP [Public Sector Purchase Program] (2015 to 2020) to which in no way can be attributed a basis for proportionality at that time.
- Also the cessation of the ECB’s new loan purchase program (PEPP [Pandemic Emergency Purchase Program]) on the same grounds.
- A more unequivocal formulation of Article 123 AEUV on the ban on monetary state financing so as to here limit the latitude of interpretation.
[Translated by Todd
Martin]
