Legal, compliant and suitable: The ECB‘s Pandemic Emergency
Purchase Programme (PEPP).BertelsmannStiftung/jacques Delors Centre Policy Brief 25 March 2020
The ECB has announced a 750-billion-euro purchase programme to fight
the economic impact of the COVID-19 pandemic. But like all ECB programmes
in recent years, the new Pandemic Emergency Purchase Programme
(PEPP) will likely be challenged in court. This policy brief assesses whether
the PEPP will likely survive a legal challenge. It argues that the PEPP is compatible
with EU law because it meets the three criteria the Court of Justice
of the EU has established to check the legality of monetary policy measures:
First, the PEPP falls within the ECB’s mandate. Second, it respects the
principle of proportionality. And third, it does not violate the prohibition of
monetary financing. This assessment even holds if the ECB were to relax
some of the constraints in the PEPP like the issuer limit currently applicable
to other bond-buying programmes
