Integration through (case) law in the context of the Euro area and Covid-19 crises: courts and monetary answers to crises

ABSTRACT

The aim of this article is to analyse whether, why and with which consequences courts support or on the contrary oppose decisions taken by non-majoritarian institutions and governments, and hence constrain or, on the contrary, enhance the integration process in times of crises. Focusing on judicial decisions on the subject of the European Central Bank’s (ECB) monetary policy by the Court of Justice of the EU (CJEU) and the German Federal Constitutional Court (FCC) during the Euro area and the Covid-19 crises, the article shows that during the Euro area crisis, the European judicial system had an enhancing effect on the ECB’s monetary policy; on the contrary, it has had a constraining effect during the Covid-19 crisis. Four different institutionalist explanations are put forward, relating to: the severity of the crisis; the timing of the judgments; the legal framing of the judgments; the functioning of the judicial system.

KEYWORDS:

• Judicial politics
• Court of Justice of the European Union
• German Federal Constitutional Court
• Covid crisis
• economic and financial crisis

Acknowledgments

We would like to thank the editors of this special issue as well as the two anonymous referees for their persceptive and constructive comments on an earlier version of this article. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The preliminary procedure allows – or obliges, depending on the situation- national courts to submit preliminary questions to the CJEU when experiencing difficulty interpreting European law and assessing the validity on a EU act.

2. In BVerfGE 37, 271 (1979) the FCC reserved the right to review the compatibility of European and German law in each individual case ‘as long as’ (solange) the Community law had not received ‘a catalogue of fundamental rights decided by the parliament and of confirmed validity’. Then in 1986, in BVerfGE 73, 339, the FCC softened its position: ‘In view of these developments, it must be held that, so long as the European Communities (Solange die Europäischen Gemeinschaften …) and in particular the case law of the European Court, generally ensure an effective protection of fundamental rights (…), the Federal Constitutional Court will no longer exercise its jurisdiction to decide on the applicability of secondary Community legislation …’.

3. ‘Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough’.

4. The German federal constitutional court later sent its second ever reference to the CJEU in the case concerning the ECB’s public sector purchase programme (PSPP). Here, too, the CJEU found the ECB’s actions in conformity with EU law. It is this case which was decided during the pandemic and, for the first time, had triggered the FCC’s substantial (and not only procedural) opposition to an EMU decision.

5. https://www.ecb.europa.eu/mopo/implement/pepp/html/index.en.html

6. Members of the ECB have often urged Member States governments to do their job and take action, in coordination with the monetary policy.

7. Court of Justice of the EU, Press Release N°58/20, Luxembourg, 8 May 2020.