June 16. 2021. 10:00

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EU to launch legal steps against Germany over ECB ruling

The European Commission will start a legal procedure against Germany on Wednesday, investigating whether a German court broke EU rules by challenging central bank bond purchases already approved by the top EU court, two sources said on Tuesday (8 June).

In May 2020, Germany’s Constitutional Court ruled that the European Central Bank had overstepped its mandate with bond purchases. However, the EU’s top court had earlier already given the green light for the ECB scheme.

The European court admonished the German judges for their ruling, arguing it alone had the right to decide whether EU bodies are breaching the bloc’s rules.

The two sources said the Commission, the EU’s executive arm, was expected to agree on Wednesday to send a letter to Germany notifying Berlin that it was investigating whether the German court’s ruling had violated EU rules.

Such a letter is the first stage in a process that can ultimately lead to the Commission asking the EU’s Court of Justice to impose penalties.

One of the sources said the German court ruling was viewed in Brussels as a dangerous precedent for EU law, which could lead other member countries to assert the authority of their courts above that of the EU court.

German ECB ruling should ‘spur’ more eurozone integration: Merkel

Chancellor Angela Merkel said Wednesday (13 May) that a bombshell ruling on the European Central Bank by Germany’s top court should “spur” efforts toward greater eurozone integration.