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EU’s top court reasserts primacy over national judges after German challenge

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Via Financial Times

The EU’s top court has sought to reassert its legal superiority over the member states’ national tribunals after Germany’s constitutional judges stunned lawyers and policymakers by challenging one of its rulings.

In a rare statement, the European Court of Justice said on Friday it had received “many enquiries” regarding the Karlsruhe court’s judgment earlier this week, that rebuffed part of an ECJ ruling in 2018 on the European Central Bank’s bond-purchasing programme.

The EU’s legal order would be jeopardised if national courts diverged from its rulings on whether EU institutions’ actions were compliant with the law, it said.

“In order to ensure that EU law is applied uniformly, the Court of Justice alone — which was created for that purpose by the Member states — has jurisdiction to rule that an act of an EU institution is contrary to EU law,” the statement read.

“Divergences between courts of the Member States as to the validity of such acts would indeed be liable to place in jeopardy the unity of the EU legal order and to detract from legal certainty.”

The statement escalates an unprecedented rift between the European court and the highest court of the EU’s largest member — over a topic that has significant implications for the recovery from the coronavirus crisis.

On Tuesday, the German constitutional court criticised the ECJ’s approval in 2018 of the ECB’s bond-purchasing programme as “untenable from a methodological perspective”.

Its announcement that the ECJ had acted beyond its mandate in issuing its ruling marked the first challenge of its kind in the history of the EU — triggering widespread alarm among senior EU policymakers and lawyers. 

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Among the key concerns is that member states that are already clashing with EU decisions — most prominently Poland and Hungary — could use the precedent now set in Germany to defy the European court’s judgments. 

Speaking on Friday at the State of the Union video conference organised by the European University Institute, Charles Michel, European Council president, said the rule of law implied the “mutual respect between institutions” and “respecting the fundamental principle of the hierarchy of norms and the primacy of European law”.

The Karlsruhe judges in their ruling also instructed the German central bank not to participate in any future eurozone-wide bond-buying schemes unless the Berlin government ensured the ECB justified the “proportionality” of the measures within three months. 

Christine Lagarde, president of the ECB, said in a speech to the State of the Union event on Friday that the bank would do “whatever is necessary” and remained “undeterred in delivering on our price stability mandate”. She added: “We must ensure there are no undue constraints on our policy response”.

Paolo Gentiloni, EU commissioner for economic and financial affairs, told the same event that Brussels authorities would ensure that both the “primacy of the European jurisdiction” and the “independence of the ECB” were respected as crucial elements of the EU treaty.

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