um
and um because what happened uh after
this decision was that you had almost
the impression you were with in the
discussion of a football match you had
the team you know second setting of the
constitutional court on the one hand and
the team european court of justice on
the other hand what you did not have
very often was
a classical traditional analysis of the
judgment and the judgments in fact of
both courts
as such
and what i try to do is to
better understand the thinking
in the expressed in the judgment rather
than
to be one on one of those two teams
and
to explain i start with the independence
of the german bundesbank uh and then go
on with the omt case which actually is a
very important precursor to the pspp
uh uh case in fact i would i would
suggest that the confrontation is not to
be cannot be understood without the omt
case
as a background
and then i go to the pspp uh program
between the two courts uh and then i
speak about the aftermath and draw some
brief conclusions
and now i'm locked here again is that
working this way
oh now it works again thank you very
much so i want but i wish to start with
the constitution where else uh on the
federal bank
and actually this article is already
from
1949 and it only determines that the
bundesbank
is a federal bank federal system so the
federation
will have a federal bank as a note
issuing and currency bank
and the second sentence was uh added in
1993 with
the maastricht treaty
within the framework of the european
union its responsibilities and power may
be transferred to the european central
bank that is independent and committed
to the overriding goal of assuring price
stability so price stability was only
introduced in 1993 in the constitution
but the famous independence of the
bundesbank
was not in the constitution
formerly but in the bundesbank gazettes
as an independence of direct orders from
the federal government
no more no less
no direct orders
but in practice
when i grew up in the 70s and 80s
there were two institutions which were
not beyond criticism but which had to be
criticized very cautiously and carefully
and if somebody oversteps the criticism
he or she was
directly uh had directly to to take it
back
because it was politically problematic
so one institution was of course the
federal constitutional court
and the other institution was the
bundesbank and interestingly enough
those two institutions never clashed
they avoided a clash if you like or
didn't have the cases to clash which is
up with each other uh if the if
politicians were uh uh criticizing the
central bank the next day they came
under heavy crit counter criticism and
usually uh this was criticism was not
successful
politically successful
so the independence of the federal bank
was
both in the law but also in the
way the political system was working and
was was perceived
rather than in the constitution
i will leave out the article 23 on the
european union
but
i will
now draw your attention to the referral
in the omt omt case omt is outright
monetary transactions but in fact it's a
famous speech by draghi saying and i
tell you it will be enough
and that was a program set up behind
closed doors and there was a press
release and about this press release the
whole case was annoying back the
question was whether that uh program uh
was uh in fact its announcement because
it never was actually executed it was
never the action on on this program was
a speech by the central bank president
uh
whether that had been legal uh and
constitutional uh so the first thing
what and this came to the constitutional
court uh because there are i can't
explain this here but there are
admissibility questions on whether there
is a right to democracy uh the court
largely resolved it in favor of such an
individual right to democracy about the
limits limitations we have to speak at
the other okay on another occasion um
and the argument was that we never had
contracted out so to speak uh the
uh
a program like this omt program which
would uh help be
play the role of assertive lender of
last resort um with regard to
economic policies
and so the
federal constitutional court duly
requested the
european court of justice
whether the european central bank had
exceeded its mandate for monetary policy
in putting forward this outward monetary
transaction program
and it added a lengthy
decision why it sought that
to be a critical question and probably
to be answered in the positive
uh arguing but however adding in
paragraphs 199 and 100
sort of compromise
and i would like saying that these
concerns regarding the validity of the
omt decision could may be resolved by an
interpretation in conformity this union
law
and it suggested for or at least four
criteria
if the omg decision could be acceptable
if there was only a limited volume of a
possible purchase of government bonds
uh if the bank did not participate in a
debt cut with the bonds it
had bought
uh if it observed a certain time lag
between the emission of a government
bond and its purchase in fact uh already
the
treaty on
the functioning of the european union
disposed partly of this question because
it said that direct purchases were
excluded there could only be purchases
on the market and the question was how
big the time lag between
the issuing of the bonds and the buying
by the central bank should be
and that bonds should not be held to
maturity uh that should be uh sold again
before they became a
became major
um and that and then the omg decision
could be in extremely compatible uh with
the european treaties and therefore also
with the delegation uh by uh the uh
federal parliament uh
in as a master treaty
and in fact
already then
but also later the
german consumer court also referred to
proportionality because the mandate of
the european central bank is limited to
monetary
policy and does not
contain
policies
economic policies if there is an
economic decision to help a certain
country it must be made by the political
branches and not be made by the central
bank that i see
in a nutshell the idea
but if you look at
the article five of the tritium european
union which contains the rules and
proportionality to be applied you see
that it is a little bit more difficult
because article 5 paragraph 1 says
not that the competences are limited by
proportionality it says that the use of
union competences is governed by the
principles of subsidiarity and
proportionality the use of union
competences you could also say the
exercise of union competences that would
be would have been more clear so
actually it presupposes the existence of
a competence
uh and then it says but how you exercise
it you must observe for personality and
then paragraph four it
defines for personality the content and
form of union actually should not exceed
what is necessary to achieve the
objectives of the treaty only necessity
interestingly enough in the treaty
itself
only what is necessary to achieve the
objectives of the treaty
but if you refer to paragraph 1 you
could already ask yourself whether a
competence which is complete such as the
monetary competence of the central bank
is can be subject to proportionality
there is a certain contradiction there
if you have a complete competence and
something so you can't exercise it in a
proportionate way you have it or you
don't have it
um
but even if you but the problem is of
course that if and that was the problem
of the
core problem of the omt decision uh in
the view of the uh second senate um that
was that um
the monetary policy was with the central
bank and the economic policies was with
the member states and with a certain
coordination function of the
european union
of the political part of the council
but how do you distinguish between on
the one and monetary policy and general
economic policies almost impossible you
would think and the idea of the court
was to use proportionality for to that
purpose
not necessarily article 5 for
personality but proportionality for
dividing those two competences actually
something which for the more
sometimes more concrete competences
within our federal state we always the
whole court has always rejected to use
proportionality for uh this uh
for dividing com for separation of
competences uh because it is so unclear
it is a balancing exercise in the end
and balancing uh is not very good in the
federal system
to know who is responsible for certain
act or a democratic problem because it
must not mean the the respective
electorate must know who is which
scoundrels to throw out in the next
election so to speak
um
uh what did the european court of
justice answer it accepted the
proportionality argument and maybe that
is at the core of the dispute between
the two courts later on that it accepted
this personality argument which it
probably didn't need to uh under article
five you could have said this is a
complete competence on monetary policy
and we find an uh dividing line a clear
dividing line between monetary policy
and specifically and generally general
economic policies on the other hand and
then we don't need proportionality and
so on but it didn't that it didn't say
that probably knowing that indeed this
to find a clear distinction between the
two is problematic to say the least so
it says yes
that a bond buying program forming part
of monetary policy may be validly
adopted and implemented only in so far
as the measures that it entails are
proportional to the objectives of that
policy
uh accepted that proportionality applies
uh and then it repeated in array article
five
paragraph four and saying that it does
not it
it should not go beyond what is
necessary in order to achieve those
objectives uh the uh
which the acts of the europe you may
have
but then it adds that these are choices
of a technical nature
and they involve forecasts and complex
assessments and therefore the central
bank should enjoy broad discretion and
thereby limit the judicial
control
of such acts
uh so whereas the
constitutional court wanted some sort of
exercise of full control
uh and realize i mean that was
completely counter the original idea
that the europe that the central bank
should be completely liberated from
political influence
or from influence of other branches
including judicial branch here it says
we need to have strict judicial control
and the european court of justice says
but wait a minute there must be brought
this question uh proportionality applies
uh but
the discussion is is very broad and
actually it doesn't mention economic
policy as the other as the other
competence it simply says
the policy itself must be proportionate
and comes then to the conclusion that
the certain procedural guarantees uh
and a
careful examination of all the relevant
elements
and adequate statement of the reasons
for decision the central bank would have
quite a lot of leeway
nevertheless uh it's it
included a certain limits uh uh similar
to the better constitutional court
saying that the scale of the program
must be limit is limited in the number
of ways
um
it first of all
it
only applies to
states which have a macroeconomic
adjustment program already in place so
it is in line with economic policy
and not some separate policy
it says the maturity
of those bonds were was up to three
years only uh the isis escb reserved the
right to sell at any time but he didn't
agree that it could not wait until
maturation that is uh so it remained
below what the constitutional court had
suggested
and it also said only a limited part of
the government bonds could be bought and
the commitments would be circumscribed
and limited um
and such a program can be put into
effect only when the situation of
certain of those states has already
justified ems intervention that was they
were already under this policy as
described before
and those circumstances a program whose
volume is restricted and could
legitimately be adopted by the escb that
is the european system of central banks
without a quantitative limit being set
prior to its implementation could
nevertheless be justified
um and
then it said this must say selectivity
of the program uh must be uh uh uh
rectified by uh
the disruption of the ecb's monetary
policy um
is intended to rectify the destruction
of the monetary policy so actually it is
within monetary policy to rectify
disruptions
and
it's
limited to parts of the euro area which
are particularly affected and thereby
preventing the scale of that program
from being needlessly increased so it's
a limited program it says in so many
words uh by uh several instances and
therefore uh it does not infringe the
principle of proportionality there are
other arguments in the ecj but i wanted
to limit my presentation on
proportionality here because that was a
main challenge also later on um
the federal constitutional card had lots
of problems with this response by the
ecj but nevertheless the decision was
quite in friendly terms or
at least on the surface and the
constitutional court answered and said
oh yes we may in the end the german
bundesbank may participate but it said
also the purchases could not should not
be announced before the volume should be
limited from the outset in fact things
which the european uh court of justice
had partly rejected uh there must be a
minimum period between the issuing of
the government bonds and they are
purchased by the escb um that is
a point which actually is already in a
thought in a way in article 123 of the
uh
of the treaty
and only government bonds of member
states are purchased that have bond my
article 125 sorry a purchase that had
bond market access enabling the funding
of such balls so it must be market
access this is included greece excluded
greece at the time purchase bonds are
held under maturity only in exceptional
cases so this is a retrenchment towards
the original request that there should
be never be held under maturity so now
they say this is exceptional only and
purchases are restricted or
decreased so these were the conditions
uh by which uh the german federal
constitution court accepted the omt
program and then we come to pspp
i had 20 minutes not 10 i'm sorry
i didn't i don't speak for 18 minutes
now do i
sorry i need five i've saved five
minutes more um
what the court did i'm not going to read
the whole thing i just wanted to show
that the court
asked a long question for the next
program for the psbp program
this is secondary markets public sector
purchase program
uh there's a lot of sub programs i'm not
an expert on these things so i'm not
going into the details of those programs
and here you see this in fact the same
problems uh which arose with regard to
omt only that the pspp was actually
executed it was not only theoretical a
program to solve a practical problem but
it was actually implemented and is
implemented under this day even
yesterday the the european central bank
decided they would stop additional
purchases but they would substitute uh
those bonds which have been out of uh
which have which have been matured they
would substitute it by newborn by number
you buys so actually the program still
in a way uh goes on even if the names
are changing
and in fact uh
a similar set of questions was asked as
an omt
and what the then the european court of
justice answered by saying uh well
there's this problem of deflation uh
which
we are facing yesterday yesterday of
course today it's just the opposite and
so it was about deflation and
key interest rates were to refer to low
and therefore in few of the foreseeable
effects of the pspp
and because there is no other type of
monetary policy measure addressing
necessity as part of a proportionality
analysis as a pspp does not manifestly
go beyond what is necessary to achieve
that objective
to countering inflation basically that
was the core of the argument
and
why then we the court reacted with this
massive
uh response saying that is not what we
intended uh originally already with omt
and now this pspp well
the analysis was not very deep one could
say of ceca decision uh and was not
using proportionality in the full sense
of the
of the doctrine which would be
which would include a balancing
element balancing
between
the
monetary
goal
on the other hand
economic policy is not part of the
competence of the european union
remember
and the economic effects um which
must should remain in line with what was
politically decided so that was what the
constitutional court in so many words
requested
and here is another head node the
fundamental interests of the member
states are affected the integrations
program is
an issue judicial review may not simply
accept positions asserted by the
european central bank so there was a
feeling that
the in in omt's easy day had promised
personality review
and in vice it had not acted on that
promise had only uh offered a
superficial personality review
so this probably this
this idea to be um and you see it in the
lines of the of the judgement that the
european god of justice had not held up
uh to its promise from omt and that was
uh the main problem and here you have
again the question of the delimiting of
competences the great importance of
proportionality uh for the question of
competences with regards to monetary uh
policy uh i don't have time to go into
the details uh the end was that there
was
a court the constitutional court came to
the conclusion that the actions of ccp
had no basis in primary law uh
the action in fact of the european court
of justice in not completely controlling
the ecb so it was about the control
judicial control exercised by the ecj
because then then when the court then
approached the question whether the
program itself was violating
proportionality it came to a different
conclusion
it is not possible to reach a conclusive
decision about the proportionality of
the program because the proportionality
a review by the ecj had been so
deficient that was the argument of the
court so actually all the ir got did not
get to the central bank it gets to go to
the court not having controlled it
properly uh and therefore in fact the
main question was left open and that
also uh limits of course the kind of
violation of european law which may be
seen in that judgment because it also
said the control was not sufficiently
exercised
and therefore
uh what was the consequence of this
finding the consequence was that the
german federal government and the
bundestag were required to take steps to
come to a full proportionality
assessment by the european central bank
and of course that's very difficult to
get because we have here national
institutions and we have an independent
central bank in the treaties and as a
which is a european uh and not a
national german institution so actually
not actually uh uh uh uh
responsible before the buenos aires
uh in a way and limited by the treaties
but those treaties are controlled by the
european court of justice
and so german constitutional organs now
had to find a way to get the central
bank to exercise its proportionality
review and
to the surprise of many what happened
was that the central bank said well we
have already done this for personality
review at the time we just didn't talk
about it publicly
and then they referred certain documents
to the german parliament why is the
european parliament a very interesting
kind of
dialogue uh taking place uh and then
actually uh the parliament came to the
conclusion that this was enough uh the
proportionality review had taken place
uh and therefore uh the uh conditions of
the second senate were fulfilled
the claimants of course were not at all
happy with that result and went again to
the constitutional court saying well
that's not true that was not real review
it was not in the open some of the
documents were secret it said when only
so only members of parliament could look
into them etc
interesting enough the court now said
well
no we can't decide that for two reasons
first of all already uh uh
the final point uh that the final point
being that uh in an ex in a in a
judgment on execution we only uh can
judge about what happened until the
judgment and what happened after the
judgment is not uh actually under our uh
uh jurisdiction so you can bring a new
complaint uh which probably they have uh
done but secondly uh for probably
for preventing a new complaint from
coming up the court said all ultimately
however
the activities which the federal
government has shown are enough
they have
assured that
the central bank had made a
propositionality review a proper one
and if this is not in the op in the
public eye
that is not a general problem uh
important is that the proportionality
assessment has taken place and that the
political advantages are satisfied that
were let's say those assessments were
sufficient
uh and uh in the end the commission
however started still started an
infringement procedure against germany
because of the judgment of the second
senate
but then in last december it decided not
to follow up before the european court
of justice there had been an exchange of
letters and the government had said that
it would seat would recognize the
authority of the court of justice uh and
would assure the autonomy primacy
effectiveness and human uniform
application of union law
interesting enough however it also
wanted to do everything its powers to
avoid further ultravirus findings
findings that the european union had
acted beyond their competences
and the interesting thing about it is
that um
in this letter of course the german
government could not promise that the
constitutional court would not come in
another case to
to a parallel uh uh conclusion that uh
the european court of justice or any
other organ had acted ultravirus that
that the government could not promise it
did not promise i've seen the letter
it's not public but
i can assure you that the government did
not promise
because it could not promise it
but of course also
the commission must recognize that
courts are independent organs and cannot
be influenced by the government so the
government could not promise what the
courts would act and courts would never
give a promise for future uh decision
decisions to get in one way or the other
that was the end of the of the matter
so far um what can what conclusions can
we draw well first of all it's
interesting that this old
debate on independence of central banks
in a certain way has vanished at least
independence before judicial organs
there is not
central banks are bound by law and
therefore they must be controlled uh and
in fact both courts have controlled them
the question about between them was how
how closely they the independence needs
to be checked but that it needs to be
checked there was agreement between the
courts
um
in fact whether the principal principle
of functionality in article 5 of tu is
confined to the use of eu competencies
presupposing existence of a competence
nevertheless proportionality here can be
used for
dividing unclear competences
between the european and the domestic
level
nevertheless the central bank has
brought this question
and that is also both a matter of
constitutional and of european
law also in general no debate on that
the federal constitutional court also
says proportionality and balancing needs
to be done between monetary policy
objective on the one hand and economic
policy effect on the other
the court of justice said no has not
accepted that but the central bank in
practice has by in fact re-executing its
proportionality analysis in a way has
accepted that it must do that and it
must do so so probably the central bank
follows uh the indirect way also the
decision of the second senate
but we also have seen that an execution
of a judgment stating a violation of
this requirement is virtually impossible
because how can
the
constitution court gets the political
national political branches to
effectively control the european central
bank that matter is unresolved because
execution was
was given
but more than that
is probably not possible
and that also means that the control of
central banks is after all limited
because transparency
was not given we are assured now that
such
balancing has taken place but we don't
still know how it exactly
was
concluded
and that's very important
and that also shows
that
transparency and proportionality can be
limited of limited use because if the
central bank would in public say well
this decision is
good for
for slovakia but bad for slovenia
could it do so as a european institution
could you really imagine that they make
this kind of economic assessment very
doubtful to say the least and therefore
there needs to be judicial control of
the central bank but we will not come to
some sort of a central bank publicly
immediately explaining its decisions so
that the real
trade-offs of a decision
are known that is a question maybe in
the end for historians of the central
bank thank you very much
that was excellent
i'm sorry thank
andreas that was excellent and then of
course uh this was not your senate
so in a sense you are an observer from
the outside and inside and now you are
completely on the outside of course and
and the next uh person to speak is
michael weibel who
basically has been an academic like most
of us uh
but he's got an unusual academic career
with a very
impressive
doctorate and
a very impressive american journal
national article which you all admire
and then of course he he went through
the cambridge system before he returned
to his home country of austria where
he's a professor in one of those
fantastically distinguished uh
chairs at the university of vienna and
michael it's a great pleasure to welcome
you and you have unmuted yourself and
you sit there completely ready and you
are
on our screen here and as big as we i
think we get you on the screen yeah
michael
uh um thank you so much uh mars for the
kind introduction and thank you um to
you and to astrid for the invitation and
especially also for accommodating me um
through a virtual participation
it is an honor to speak after uh former
justice um
paulson um
though of course i am an outsider by
several degrees more to this subject
matter i'm by no means an expert on
german constitutional law
unlike um andreas um
and
um so please take what i say
in my comments now with that uh camp yet
and it's perhaps fitting that andreas
and i met for the first time
16 years ago at the austrian
international law days which were held
in munich in 2006.
and i'm again at the very conference in
paso
today
and that's the reason why i cannot be
with you in oslo today for which i
apologize again
now let me turn to
um the german constitutional court and
central bank independence so this
judgment was handed down
at the time when uh kobit 19 had left
deep scars across many eu member states
and as um andreas has explained
um the court um found
that the pspp program had exceeded the
monetary policy mandate of the ecb there
was a very strong language some would
say striking language in the judgment
directed at the court of justice
its judgment was untenable it was
incomprehensible and it was actively
arbitrary and as a result the the pspp
was ultra
virus now these judgment this judgment
raises important questions about central
banks
much more generally and the degree to
which andreas has already mentioned this
central banks should be subject to
judicial
control and it raises some of the
questions that are part of this workshop
too
about how do we ensure
accountability more generally of central
bank now whatever else one might think
about this judgment it has the merit of
having put a spotlight on these
fundamental
questions which perhaps for
a long time
have
been overlooked
now in my view even though
the aftermath that andreas has also
described of the judgment meant that
this saga ended on a on a whimper rather
than on a bang
at least some of the damage
by the judgment has been done damage to
the independence
of the euro system
including the german
central bank
the pspp
judgment
sought to challenge not only
according to the individual complainants
the actions or inactions of german
the german government um the german
parliament but also
of
the
bundesbank and of the european central
however the german constitutional court
declared that the complaints weren't
admissible with respect
to
the bundesbank and
with respect to the ecb so in that sense
the bonus bank of the ecb
were
third parties to
these
constitutional complaints
notwithstanding and that's something i
find quite remarkable
the court the german constitutional
court found that the decision
sorry that
the pspp program
enacted by the ecb
could have no effect for german
institutions including the bundesbank
because it failed to comply
uh with german constitutional
requirements
now this is remarkable i think because
given the peculiar structure of the
europa system if in which where we have
a close
um interaction between national central
banks which have
much more influence in this system
than the center the european central
bank
this does amount to judicial view
of the ecb and of the bundesbank by the
german constitutional court
through
the back
door
and there is
little consideration
no meaningful consideration in the
judgment of
why this might be problematic from the
perspective of the ecbs and the
bundesbank's independence and i fully
agree with andreas that this feature
this problematic feature in my view was
already foreshadowed by the omt
judgment
now here on this slide you can see some
selected reactions and admittedly these
reactions belong
primarily to
one camp that andreas mentioned
to this judgment but it's still a
a diversity of viewpoints we have a
historian who speaks of the hubris of
the german constitutional court katarina
pistor
says the german constitutional court
goes rogue
with a subtle touch of irony the
financial times says a german court
decides to take back control
uh french newspaper le monde
um calls it a challenge by german judges
um
and and so on um spanish newspaper el
mundo um highlights refers to the german
fork in the road referring to germany's
ambivalence
to european integration developed in
particular over the last decade and one
newspaper in italy referring to an
ultimatum to
the ecb
now let me move on to
um why this judgment is problematic from
the point of view of the ecb's the
escb's independence which includes all
the national
central banks what i find remarkable
striking indeed is that the pspp
judgment refers to the ecb's
independence or the independence of the
bundesbank
only four times three of these mentions
of independence are when it summarizes
the submissions
and it's only once
that we find a mention of independence
but independence is mentioned as a
reason for why the mandate of the ecb
needs to be narrowly construed not as a
reason why
there ought to be
arguably
some
significant margin of appreciation that
ought to be
ported to um the central bank both the
ecb and um the bundesbank and i think
that's uh striking not only uh from the
perspective against the background of
germany's long-standing
concern
i would say
a justified concern
with ensuring
that the euro system becomes an
independent
institution independent of governments
and
of
member states more
generally and it's of course also at
some variance with the guarantees for
independence which germany in particular
fought very hard for in the treaties on
the european uh union and andreas
mentioned to some extent that there may
be some divergence this is also
reflected in article 88 of the german
basic law which does refer that to the
independence of
the ecb
so almost no consideration
given that to independents it does of
course um this judgment raised the
question about
what degree
of judicial review
is necessary to ensure the
accountability of central banks in
democratic societies
and
given the peculiar structure of both the
euro system and
of the european union more generally
the ecb especially is of course not
embedded in a national system of checks
and balances unlike central banks in
other
countries
but in my view
the judgment the approach it suggests
for a relatively detailed scrutiny
of central bank
decisions in the monetary policy
domain
does undermine the independence of
the central bank
and this type of intrusive review
is unusual internationally so it is very
uncommon
for
courts to review monetary policy
decisions for proportionality
for example the bank of england enjoys
statutory immunity from suit insofar as
its monetary policy is concerned and we
have a similar
position in the united states
largely because of non-justiciability
but the federal reserve system
is largely insulated
from judicial
scrutiny and
i think by and large with perhaps some
adjustments that
remains an appropriate stance of courts
when it comes to monetary policy let me
come to my
final slide which is on the standard
of review
so in this
matrix i've drawn a basic distinction
between monetary policy on the one hand
and financial supervision on the other
hand
we are
with the pspp program clearly not in the
domain of financial supervision it's not
the kind of it's not a decision by a
central bank that affects individual um
financial institutions or groups of
financial institution
it is a
monetary policy though of course
monetary policy in a somewhat
unconventional
sense monetary policy
broadly
construed
but i think if we are in this domain of
monetary policy broadly
construed
one can draw a further um distinction
and and that is whether
this is using the terminology of the
german constitution
german constitutional court uh whether
we have a basic right that is at stake
or no such basic right that is a mistake
the german constitutional court
does regard um there being a basic right
a mess conversations referred to
democracy this right to vote that
becomes supercharged in these
constitutional
complaints that allows individuals or
groups of individuals who have suffered
no direct injury from challenging
decisions
of the central bank that affect
people across the entire
euro
zone
so
i think this construction um is
problematic in this particular domain um
at least and i think it's from my point
of view it's difficult to argue that a
basic right that is
at stake because no basic right in my
view is at stake
um the standard of review that is
appropriate in these circumstances is
one that is highly deferential similar
identical to the one that was adopted by
the court of justice in
in the wise
case
that means
that we
we don't constitutionalize
the right to vote
to with the effect that individuals can
challenge
monetary policy decisions that they
might dislike for one reason
or
another
it's it's important that
at most um there is a rational basis
review of monetary policy decisions even
if we are
looking at basic uh rights as
the german constitutional court
understands it um what is problematic is
if courts engage in a full
proportionality
analysis
because in professionality analysis
there is usually a requirement in the
third step
that you show
um
that there aren't any less restrictive
alternatives and that really becomes
very intrusive at least in this domain
it operates
a decision maker in this case um the
european central bank for failing to
make use of what arguably our less uh
restrictive
alternative means it means in effect
that we have courts second guessing um
an incredibly
complex balancing exercise that has been
undertaken
by
decision makers
when it is very difficult
to
balance these competing interests and
there's a risk that courts substitute
their own views uh on what they consider
to be
a more appropriate policy
for what um the agency that is uh
entrusted with on this important task so
yes maybe rational basis review
can be appropriate but i'm very
skeptical
about um
anything more
intrusive such as proportionality review
now let me
conclude by by saying that that this
judgment
despite
its effects having been muted through
the aftermath
raises serious
questions um about the future conduct of
monetary policy in the european uh
monetary union
and i think it is it raises these
questions in particular if it marks a
sign
of the loss of trust of the german
people
in uh monetary that union it is of
course part of a series of cases and a
relationship that has become
increasingly fraught in the last decade
between
certain policy makers outside the
central bank and
the euro the european central bank
especially
in the last decade thank you very much