LUXEMBOURG (CN) — In an unprecedented move, the European Union’s highest court hit back against Germany’s top court on Friday after the national judges contradicted one of its rulings.
In a public statement, the European Court of Justice said that it alone has jurisdiction over the European Central Bank, after Germany’s Federal Constitutional Court held on Tuesday that a bond-buying program overstepped the bank’s mandate. That decision runs directly counter to the 2018 Weiss and Others ruling from the Court of Justice.
It is the first time in the Luxembourg-based court’s 68-year history that it has made such a declaration.
“For the first time in the EU’s jurisprudence history, a national jurisdiction openly attacks the European jurisdiction,” former EU President Jean-Claude Junker told a German radio show on Friday.
A group of academics, together with the former leader of the far-right Alternative for Germany party, Bernd Lucke, brought the case in German court over a quantitative easing program undertaken by the ECB.
In 2015, the bank launched the Public Sector Purchase Program, spending 2.1 trillion euros ($2.3 trillion) over four years to buy bonds issued by central governments and agencies of the 27-member political and economic union. Lucke argued the ECB was engaging in monetary policy and subsidizing national debt, both beyond the bank’s mandate of ensuring the euro’s stability.
Tuesday’s ruling from the Federal Constitutional Court would keep the Bundesbank, Germany’s central bank, from participating in quantitative easing programs, unless the ECB changes the program within three months.
“This could be a disaster,” said an economist who works at the bank, speaking on the condition of anonymity.
In its statement Friday, the Court of Justice said that divergences between its rulings and decisions in national courts could “place in jeopardy the unity of the EU legal order and to detract from legal certainty.”
“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.
European Commission spokesperson Eric Mamer similarly said that despite the German court’s ruling, “we reaffirm the primacy of EU law.”
The decision from the German court comes at an especially difficult time for the EU. The ECB has just launched a 750 billion euro ($814 billion) program to help countries weather the coronavirus crisis.
The bank said in a statement that it “took note” of the German court’s ruling. ECB President Christine Lagarde told a Bloomberg webinar on Thursday, “We are an independent institution, accountable to the European Parliament, driven by mandate.”
The Court of Justice itself is also under pressure from Germany’s eastern neighbors Poland and Hungary. Policies in those countries to curb the rule of law and limit judicial independence have been repeatedly struck down by the court in recent months.
“This ruling shows that in the dispute over reforming the Polish judiciary, the Polish government is right. And we will consistently defend this position,” Deputy Minister of Justice Sebastian Kaleta said at a press conference this week in reference to the German court’s decision.
His country just lost another case in the Court of Justice last month over the creation of a disciplinary committee that critics say is aimed at removing judges who disagree with the ruling far-right party.