ECB: European court reframe Karlsruhe

The European Court of Justice may "never" comment on a judgment of a national court, it left its reserve Friday, three days after the Constitutional Court of Karlsruhe invited the European Central Bank to stop within three months of sovereign debt purchases if it did not warrant it. A judgment which came to contradict a previous decision of the Court, in 2018, on the legality of the purchases of assets of the ECB.

Read also: After the decision of the Karlsruhe Constitutional Court, the end of the euro?

In a short press release, the ECJ considers that it is "the only competent authority to find that an act of an institution of the Union is contrary to Union law". The Court of Luxembourg is also working to demonstrate to what extent the questioning of its supremacy could be detrimental to the Union. "Divergences between the jurisdictions of the Member States as for the validity of such acts would indeed be likely to compromise the unit of the legal order of the Union and to attack legal certainty" , she argues, adding that "national courts are obliged to guarantee the full effect of Union law" . According to the Court, "It is only in this way that the equality of the Member States in the Union created by them can be ensured".

At this stage, and while the ECB is planning to buy 1,000 billion euros this year, Karlsruhe's judgment has had no significant impact on the markets. "This has a limited effect because the ECB continues its purchasing program. His reaction was extremely clear and the markets reacted calmly, ” says a European source. However, the judgment of the German Constitutional Court is a wake-up call for European leaders.

If it loses its supremacy and its decisions are challenged, then there is no more Union

They fear that this judgment will open Pandora's box and encourage certain Member States - Poland and Hungary in mind - to question the decisions of the European Court. "If it loses its supremacy and its decisions are challenged, then there is no Union," worried a European diplomat on Tuesday. Charles Michel, the President of the European Council, called on Friday for "respect for the fundamental principle of the hierarchy of standards ".