In its recent review of the OMT policy of the European Central Bank, the German Constitutional Court questioned the competence of the ECB to adopt the OMT policy. Dr Niels Petersen will analyze the jurisprudence of the German Constitutional Court regarding the European financial architecture, while putting a special emphasis on the OMT decision.
The German Constitutional Court recently had several opportunities to review several EU measures designed to stabilize the Single European currency. The first of these decisions still stood on familiar territory. In its decisions on the European Financial Stability Facility (EFSF), the Court did not take issue with the European norms. Instead, it partly invalidated the German implementation provisions and strengthened the participation rights of the German Bundestag, a tendency that it had already shown in earlier judgments on European integration issues. In contrast, the decision on the OMT policy of the European Central Bank (ECB) had a new quality. For the first time, Karlsruhe expressed the opinion that an EU institution had acted ultra vires. The Court argued that the European Central Bank transgressed its mandate by adopting the OMT policy, according to which the Bank reserved itself the right to purchase state issued bonds on the secondary market. However, the Court did not take a final decision, but referred the question to the European Court of Justice. The presentation will analyze the jurisprudence of the Court regarding the European financial architecture, while putting a special emphasis on the OMT decision. It will highlight certain problematic elements and inconsistencies of the normative reasoning and provide an outlook on whether it is likely that a severe conflict between Karlsruhe and Luxemburg will emerge over the OMT policy.
Niels Petersen is a Senior Research Fellow at the Max Planck Institute for Research on Collective Goods. He is currently a Visiting Professor at the University of Münster. Niels Petersen holds a PhD in law from Goethe University in Frankfurt and an M.A. in Social Sciences from Columbia University. He is currently working on a comparative book project on proportionality and judicial activism.
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