The ball is back in the FCC´s ´court` [The CJEU´s OMT-decision of 16 June 2015]
While Europe holds its breath and follows the negotiations between Greece and its partners on the financial assistance, another ´piece in the puzzle` of the European attempts to contain the sovereign debt crisis has prominently featured in the press recently. The Court of Justice (CJEU) delivered its long awaited decision in the first every preliminary ruling request submitted by the German Federal Constitutional Court (FCC). Possibly the most important statement of the CJEU in the decision of 16 June was that ‘a programme such as that [OMT programme] announced in the press release’ would not violate EU law.
In the midst of the sovereign debt crisis in 2012, the President of the European Central Bank, Draghi, announced that “Within [… its] mandate the ECB is ready to do whatever it takes to preserve the euro”. Shortly thereafter, the ECB announced the Outright Monetary Transactions (OMT) programme so as to help out euro area member states that face problems on the financial markets. In brief, under this programme, which has not yet been activated, the ECB can buy bonds on the secondary market issued by euro area states, provided these states fulfil a series of requirements.
As reported earlier this year, the Advocate General recommended the CJEU to adopt a cooperative mindset and to do its utmost to provide answers to the questions raised. And indeed, the CJEU gives very clear answers. In a nutshell, a programme such as the OMT-programme does not go beyond the competences of the ECB as enshrined in the EU Treaties. Further, it does not violate the prohibition of monetary financing as laid down in Art. 123 TFEU.
Now the ball is back in the FCC´s court. How will the court react to the CJEU´s answers? Will it accept the interpretation of the OMT-programme by the European Court or will it reject it? In the case of the latter, what would happen next? As much as these questions concern the long-debated relationship between the CJEU and the FCC, they equally concern the potential effects that judicial decisions by Highest Courts and Constitutional Courts in economic and monetary matters have on financial markets. It has been widely acknowledged that the mere announcement of the OMT-programme by the ECB has calmed down the situation in 2012 decisively.
A further issue worth mentioning is the field of applicants. Some of the applicants in the German FCC proceedings have brought direct actions against the ECB at EU level. More than 5000 individuals argued that the ECB´s decision on the OMT-programme violated EU law (von Storch and Others v ECB ). Both the General Court (GC) and the CJEU (in the appeal case ) decided to dismiss the applications due to a lack of legal standing of those 5000 individuals. The rules for legal standing of individuals in cases at the EU courts are quite restrictive. By giving wide discretion to national courts that refer questions under the preliminary ruling procedure, the CJEU provides indirect access for individuals. Thus, the cases on the compatibility of the OMT-decision by the ECB with EU law are not only highly relevant in terms of economic and monetary policy, they exemplify as well the way in which the CJEU envisions the cooperation and work division between national and EU courts.