May 8, 2020 / 11:35 AM / a month ago

Top EU court says it alone decides if EU bodies are breaking bloc's rules

BRUSSELS (Reuters) - The European Union’s top court said on Friday it alone has the power to decide whether EU bodies are breaching the bloc’s rules, in a rebuke to Germany’s highest court, which this week rejected its judgment approving the ECB’s trillion-euro bond purchases.

FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, December 12, 2019. REUTERS/Yves Herman

Germany’s Constitutional Court ruled that the ECB had overstepped its mandate with bond purchases and that the Bundesbank must quit the scheme within three months unless the ECB can prove its necessity.

The Court of Justice of the European Union (CJEU) gave the green light in 2018 to the ECB scheme, which kept the euro zone in one piece after its debt crisis but which critics argue has flooded markets with cheap money and encouraged over-spending by some governments.

The CJEU did not comment specifically on the German ruling but reiterated that it was the bloc’s judicial authority.

“In order to ensure that EU law is applied uniformly, the Court of Justice alone – which was created for that purpose by the member states – has jurisdiction to rule that an act of an EU institution is contrary to EU law,” the court said in a statement.

It said divergences between national courts on the validity of such acts would jeopardise the unity of the EU legal order and even give some EU countries an advantage over others.

“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,” the CJEU said.

Asked if the matter could lead to a legal case against Germany, the bloc’s executive European Commission said on Friday it was still analysing the German ruling.

EU Commissioner for Economic and Financial Affairs Paolo Gentiloni said separately on Friday that he did not think the ruling would weigh on the euro zone’s monetary policy, stressing the independence of the ECB.

The German court’s challenge to the CJEU could set a precedent for its peers in other EU countries, said Miguel Poiares Maduro, a professor at the European University Institute in Florence, and a former CJEU adviser.

“It’s also likely to lead, not only to increased tensions between national constitutional courts and the CJEU, but between those national constitutional courts themselves, as they will feel equally tempted to become active participants in the ‘negotiation’ of the European grand bargaining on how to answer the current crisis,” he wrote in a blog on constitutional issues.

The Luxembourg-based CJEU was set up in 1952 to ensure that EU countries comply with the bloc’s laws.

Additional reporting by Gabriela Baczynska; Editing by Hugh Lawson

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