EU courts might not be supreme over national courts after all

I've been reading about a fascinating spat between the German constitutional court and the EU. 

It was sparked when the German courts upheld several complaints against the ECB's bond purchasing programme (aka quantitative easing, QE) started in 2015 that was meant to boost the economy and push inflation up closer to 2%. (More recently coronavirus has prompted more such purchases but that wasn't covered). The German court said the programme was beyond the mandate of the ECB and said the German central bank must quit the scheme within three months unless the ECB can prove its necessity. Wolfgang Munchau comments:

"The ruling raises complex and potentially troubling issues for the EU as a whole. The German constitutional court has accused the ECB and the CJEU, the court of Justice of the European Union, of abusing their power, and of acting beyond their assigned competences. That concept is known in German constitutional law as acting ultra vires. In the German legal interpretation of European integration, all sovereignty still rests with the member states. The EU is clearly not a federal state, but a deferred power. Member states have transferred certain rights to the EU. The German court said it accepts that it is bound by CJEU rulings, but only those that occur within the EU's agreed competences. All bets are off it the CJEU goes ultra vires. And, crucially, the German court decides if and when that happens. (My emphasis)

This is the most serious challenge to the EU's legal framework we have yet come across. 

We expect the ruling to strengthen the determination by the Polish government to press ahead with judicial reform, and to resist interference by the EU into what they consider domestic legal affairs."

But on 8 May the German broadcaster Deutsche Welle reported that the highest court in the EU had responded:

"In order to ensure that EU law is applied uniformly, the Court of Justice (ECJ) alone ... has jurisdiction to rule that an act of an EU institution is contrary to EU law," a statement said."

"Like other authorities of the member states, national courts are required to ensure that EU law takes full effect. That is the only way of ensuring the equality of member states in the Union they created."

Going off on a temporary tangent, I thought the Germans were meant to be on a newly discovered holiday to mark the end of fascist rule in Germany on 8 May, but apparently that is just Berlin. East Germany used to recognise 8 May as the Day of Liberation and this year Berlin has declared it a holiday. There is now a petition to make it a national holiday (like it is in France) but many are opposed to celebrating the end of fascism in the country, including the AfD, who say it was "a day of defeat". I once worked in a multi-national management team in which, rather to my embarrassment,  the Brits mercilessly repeated chunks of Fawlty Towers dialogue ("I mentioned the war once but I think I got away with it") with the Germans pretending to laugh and the Americans looking on bemused. It really does still seem that many Germans would prefer to ignore that period of history rather than celebrate the fact that it ended and the modern democratic Germany was created, though I can also understand why, for them, the re-unification of Germany marks full liberation.

Returning to the original theme (if you can still remember it) the QE program is credited with having ended the eurozone debt crisis. However, some critics (I imagine especially German ones) argue it flooded markets with cheap money and encouraged government overspending.

As noted by Munchau the German ruling stoked fears that it could be used for anti-EU efforts by the nationalist governments of European Union member states such as Hungary and Poland. There are also fears the decision could help raise objections to a new bond-buying scheme meant to support Italy, Spain and others from economic ruin due to the coronavirus pandemic. But then the EU has never been big on helping out its member states in trouble, just ask the Greeks. Though I can readily understand why the Germans have always been wary of the spendthrift characteristics of most of their neighbours, especially those to the south. But this wrangle has wider implications. As Munchau notes, in the UK the courts operated under the assumption that conflicts between EU and UK law would always be settled on the basis that EU law is supreme.

Hmm. The supremacy of the EU courts was one of my main reasons for accepting Brexit, even though I voted remain. But don't worry Brexiteers, I expect it wasn't all in vain. The legal wrangle won't be resolved anytime soon but, in the limit, I expect the EU would just produce new directives and require member states to change their laws to clarify who is really the boss if it comes to that.

Wolfgang Munchau's always fascinating blog is called Eurointelligence. There's a public and paid for version. See Eurointelligence public, 6 May; 
https://www.eurointelligence.com/public/briefings/2020-05-06.html?cHash=1ddf0cd0d27938bd36f36dc453f57cd4

The DW story is at www.dw.com/en/european-court-of-justice-slams-top-german-courts-ecb-ruling/a-53371145