Passive and Unequal: The Karlsruhe Vision for the Eurozone

BVerfG's decision on the ECB's Quantitative Easing Program (PSPP) raises two fundamental constitutional theory questions: 1) Should a case of severe excess of EU competences (ultra vires) be unilaterally reviewed by any Member State and even by its respective courts or should there be an activation of the mechanism that is provided for in multilateral international conventions under International Law, in order to ensure the sovereignty and institutional equality of all Member States? 2) Did the CJEU, by exercising marginal judicial control over the ECB's decisions on the PSPP, actually violate a constitutional tradition common to the Member States, that of exercising intensive judicial control over the actions of independent central banks or there is, on the contrary, a common tradition for judicial self-restraint on complex technical matters such as financial engineering? However, the decision raises equally serious issues in terms of the interpretation of the TEU and the TFEU. Insisting on a strict distinction between economic and monetary policy, the BVerfG essentially says “no” to the PSPP – despite it not being monetary financing- because it forms a virtual secondary bond market, a market that is actually primary. Asking the Federal Government and the Federal Parliament to impose on the ECB the obligation to further justify its choices within a three-month transitional period and for the Bundesbank to prepare an exit plan from the PSPP, the BVerfG sends a financial message that it wants a Eurozone that is economically passive and internally unequal. In fact, it sends this message as the economic crisis due to the COVID-19 pandemic unfolds and the EU necessarily takes innovative and generous measures to support Member States.