Tagged: Pringle case

The AG’s opinion on the Outright Monetary Transactions Case

By Daniela Jaros

On January 14, Advocate General (AG) Cruz-Villalón issued his opinion in the reference for a preliminary ruling on Gauweiler et al. v Deutscher Bundestag on the ECB’s Outright Monetary Transactions (OMT). The OMT Programme launched in September 2012 was part of a series of measures taken by the ECB in response to the Euro crisis accompanying the loan facilities (European Financial Stability Facility – EFSF, European Stability Mechansim – ESM).

The German Constitutional Court (Bundesverfassungsgericht, “BVerfG”) had asked the Court of Justice (CJEU) two questions in what it classified as an ultra vires review of acts of the European Union. Roughly speaking, the BVerfG wanted to check whether the European Central Bank (ECB) had transgressed the limits of its powers derived from the treaties. If the ECB had, this would have consequences for the constitutional identity of Germany. Therefore, the BVerfG first wanted clarification on whether the Outright Monetary Transactions (OMT) Programme was an economic rather than a monetary measure and whether the ECB had therefore exceeded its powers by establishing it.  Second, the BVerfG raised the question whether the OMT programme was not violating the prohibition of monetary financing of Member State. Continue reading

To bail out or not to bail out: the CJEU confirms competence to conclude the ESM Treaty

The Pringle case (Case C-370/12 Pringle) decided today is arguably the case of the year. In an accelerated procedure, the full court (all 27 judges!) answered a number of questions referred by the Irish Supreme Court on the competence of EU Member States under EU law to conclude the ESM Treaty. The ESM Treaty is a treaty under public international law concluded by the members of the eurozone to create a permanent crisis mechanism to safeguard the stability of the euro area. It is the latest answer to the ongoing sovereign debt crisis (dubbed the ‘eurocrisis’) experienced by a number EU Member States that have the euro as a currency.

Despite the good intentions of its creators, the idea of setting up a permanent international body competent to grant financial assistance (amongst other things) to eurozone members in financial difficulties goes somewhat against the foundations of the Economic and Monetary Union, which aims at ensuring price stability through sound government budgets. It is thus not surprising that a case was brought before the CJEU so that the latter had to rule on whether Member States can actually do this under EU law.

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