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1/6The Bundesbank is under a legal obligation to ignorethe PSPP Judgment of the Bundes verfassungs gerichtverfassungsblog.de/the-bundesbank-is-under-a-legal-obligation-to-ignore-the-pspp-judgment-of-the-bundesverfassungsgericht/András JakabPál Sonnevend25 May 2020If there is a situation undermining the rule of law, then it is exactly this: The Bundesbankis under a legal obligation to ignore the PSPP Judgment of the Bundesverfassungsgericht(under EU law), and the Bundesbank is under a legal obligation to follow the PSPPJudgment of the Bundesverfassungsgericht (under German constitutional law). How hasit come to this?When confronted with the question of the supremacy of EU law over nationalconstitutions, the ECJ on the one hand and national constitutional courts, especially theBundesverfassungsgericht, on the other, have always represented irreconcilablepositions. Nevertheless, they managed to prevent a clash that would have damaged theentire integration process. This was not just mere judicial courtesy: the existing détentereflected the reality that none of the actors could claim to be ultimately right simplybecause deciding between right and wrong is dependent on the point of departure one ischoosing. The positions are well known and have not changed since the beginning.1. The ECJ PerspectiveFor the ECJ, supremacy has been a direct and inevitable consequence of the specialnature of EU law at the outset. Already in Costa v ENEL the ECJ made it clear that EUlaw “an independent source of law, could not, because of its special and original nature,be overridden by domestic legal provisions, however framed, without being deprived of itscharacter as community law and without the legal basis of the community itself beingcalled into question” (emphasis added). It is by no surprise that the exact same wording isused in Internationale Handelsgesellschaft (para. 3) to justify the supremacy of EU lawover national constitutions. Later cases involving a conflict of EU law with national normsof constitutional rank no longer used the specific term “nature” (Factortame II (para. 22):effectiveness of EU law, Melloni (para. 63): efficacy of the framework decision), but theunderlying idea has remained the same: without full and unconditional supremacy EU lawwould no longer be what it is supposed to be. Naturally, in order to immunise the EU legal system from national constitutionalchallenges, its special nature must inevitably encompass its autonomy from the domesticlegal systems. Only if EU law and EU law itself can determine the rules pertaining to itsrelationship with the domestic legal system, can national constitutional reservations bedeemed irrelevant in case of a conflict. Such autonomy has been stipulated right from thebeginning, albeit without elaborating its meaning. Its first mention can be tied already tothe era of the European Coal and Steel Community, where advocate General Legrange’s2/61956 Opinion in Mirrosevich v High Authority (ECLI:EU:C:1956:9, p. 399), described thenature of the law of ESCS as possessing an autonomous character. While the originalFrench version used the term ‘autonome’, it was translated to English as ‘independent’,taking the edge out of the term. In Van Gend en Loos the ECJ refrained from using theterm autonomy and referred rather to “a new legal order of international law”, but Costa vENEL and Internationale Handelsgesellschaft were based on the premise that thefounding treaties of the EEC emanate from an ‘independent source’ – “une sourceautonome”. From time to time ever since, the ECJ confirms (here at para. 166) thatautonomy and supremacy are specific characteristic arising from the very nature of EUlaw.2. The Bundesverfassungsgericht PerspectiveThe Bundesverfassungsgericht has remained more subtle in its argument and has not sofar invoked the nature of the Grundgesetz as ‘constitution’ expressly. Nevertheless, theunderlying premise does follow from the supposed characteristic of the constitution beingthe sole source of all public authority for those under the jurisdiction of the FederalRepublic of Germany. This characteristic is necessary to postulate the theory ofconstitutional authorisation (Theorie der verfassungsrechtlichen Ermächtigung), a theoryon which all constitutional reservations towards EU law are based. Only if we accept thatsovereign powers can be exercised in Germany solely on the basis of the Grundgesetz,can we claim – as the Bundesverfassungsgericht does – that EU law is applied becausethe Grundgesetz commands so. In other words, the gatekeeper function of theGrundgesetz follows directly from the nature of the same Grundgesetz being thefoundation of all public authority in Germany.This character of a constitution might seem self-evident in a state-centred constitutionaltheory, nevertheless it runs counter the realities of a supranational organisation. What ismore, it does not even follow from the wording of Article 24 of the Grundgesetz, theintegration clause in force at the time the fundamental rights reservation was first framedin Solange I. On the contrary, as recognised by the Bundesverfassungsgericht in SolangeI (at para. 43), Article 24 (1) of the Grundgesetz expressly provides for the possibility oftransfer of ‘sovereign powers’ (“Hoheitsrechte übertragen”) to international organisations.In fact, the Bundesverfassungsgericht had to go at length to argue that the language ofArticle 24 (1) GG must be interpreted in the context of the entire constitution, already thenreferring to the identity of the Grundgesetz. This interpretation allowed for the conclusionthat “Article 24 GG does not actually authorise the transfer of sovereign powers, rather itopens the national legal order (with the stated limitations).” This denial of the possibility ofactual transfer of sovereign powers has remained the basis of all future constitutionalreservations, even though the language of the new integration clause, Article 23introduced in 1992 equally authorises the transfer of sovereign powers. The LisbonJudgment (at para. 226 ff.) attempts to distinguish between sovereign powers(“Hoheitsrechte”) and sovereignty, but this distinction fails to explain why the autonomousEU legal system shall remain “derived” (abgeleitet) (at para. 231) in the sense that itcannot take precedence over the national constitution in those areas where sovereignpowers have already been transferred. 3/6The comprehensive and exclusive nature of the constitution and its resulting gatekeeperfunction vis-à-vis EU law allows for transforming questions of interpretation of EU law intoconstitutional questions, a keen aspiration of the Bundesverfassungsgericht ever sinceMaastricht. The ultra vires reservation triggered in the PSPP judgment is doing exactlythis. Even if the boundaries of the competences of EU institutions follow from thefounding treaties, the Bundesverfassungsgericht claims the power to ultimately adjudicateabout these because, in the eyes of Karlsruhe, it is ultimately a German constitutionalissue. The argument leading to this conclusion through the right to vote as well as theprinciples of democracy and popular sovereignty is more than complicated (to put itmildly), especially in relation to an independent institution, like the ECB. But even if(supposedly) we are ready to accept the twists and turns of the reasoning of the PSPPjudgment, they only hold true if we also accept that Germany never gave away sovereignrights, only competences ultimately limited by the Grundgesetz.The above is not to say that the theory of constitutional authorisation is per se false,untrue or illogical. And we cannot say that about the autonomist view either. Leavingaside the actual German PSPP judgment and the respective ECJ judgment, bothpositions could be doctrinally coherent if we accepted their respective premises. Thechoice between the two perspectives, at the end of the day, rests on a Werturteil in aWeberian sense, or on a political choice just like Kelsen described the choice betweenprimacy of international law and primacy of domestic law.3. The Lack of Mutually Accepted Rules on Norm CollisionThat no actual conflict has erupted from these irreconcilable positions can be thanked tothe clever judicial politics of Karlsruhe and Luxemburg which tried to accommodate thebasic needs of the competing actor without compromising their own theoreticalfoundations. The best and probably most beneficial example of this wisdom is theSolange II judgment of the Bundesverfassungsgericht, which also became the model ofthe Bosphorus presumption governing the relationship of EU law and the ECHR.The conflict can doctrinally be conceptualised either from an ECJ perspective or from aBundesverfassungsgericht perspective. From the ECJ perspective, there is a cleardoctrinal answer: as the PSPP judgment of the Bundesverfassungsgericht is itself just anational legal act, in case of conflict (which is obviously given here) it is inapplicable,therefore the Bundesbank clearly has to ignore the Bundesverfassungsgericht judgment(and even an infringement procedure is possible against Germany). Also from theBundesverfassungsgericht perspective, there is a clear doctrinal answer: the PSPPjudgment has clarified the limits of the supremacy of EU law (again), so the respectiveECJ judgment is inapplicable, therefore the Bundesbank clearly has to ignore the ECJjudgment. The respective collision rules of EU law and German law have alwayscontradicted each other, there have never been mutually accepted (doctrinal or codified)rules on norm collision.4/6All eyes are on the Bundesbank now. In its first reaction, the Bundesbank expressedhopes that the problem will just go away and the ECB will do what is required by theBundesverfassungsgericht. The ECB, however, seems totally unimpressed and considersthe German judgment as non-binding. Time is ticking for the Bundesbank: the most likelyscenario at the moment when we are writing this blogpost is that the three monthsdeadline (which was set by the Bundesverfassungsgericht) will pass, and theBundesbank will have to make a choice. Whatever the Bundesbank will do, it will beunlawful: exiting PSPP will breach EU law, staying in it will breach German law. But evenif for some miraculous reason the actual collision situation could be avoided (a suddenmajor reform finishing PSPP), the old paradigm about handling norm collisions is gone. The question, whether the Bundesverfassungsgericht judgment was doctrinally well-argued is equally irrelevant for this problem (for convincing sceptical voices, see here,here and here), just like it is irrelevant whether the former ECJ judgment was doctrinallywell-argued. The issue is not how convincing the reasoning in any of the judgments is.This is now about the rule of law in a situation where legal obligations conflict each otherat the highest level without mutually agreed collision rules. In this context, theBundesverfassungsgericht’s step looks more like starting a chicken game.The PSPP judgment is not a new turn primarily because it would invent a new doctrine orbecause it would deviate from the existing case law (even though some doctrinal steps inthe reasoning are quite surprising: we would like to avoid the stark terms that theBundesverfassungsgericht used about the ECJ judgment). Nor it is new in the sense theBundesverfassungsgericht never forbade to fulfil an obligation under EU law: thisboundary was already crossed in 2015 in relation to the execution of a European arrestwarrant. It is a turn mainly because it is flagrantly giving up on a paradigm that ensuredpeace between two of the most important courts in Europe. The paradigm thatmaintaining one’s theoretical position can be combined with a practical way of livingtogether. The paradigm that the rule of law is diminished if state agencies are exposed tocontradicting legal obligations both seeking to be supreme over the competing one, andthe agencies are forced to make a choice that will inevitably be illegal, one way oranother. Duly noted, this paradigm has never been of doctrinal nature. It was cleverjudicial politics in order to preserve important constitutional values and Europeanintegration at the same time. It is unclear, what strategic goal theBundesverfassungsgericht wanted to achieve with the PSPP judgment. It is, however,more than likely that this new sort of judicial politics will equally hurt European integrationand the rule of law. LICENSED UNDER CC BY NC NDSUGGESTED CITATION  Jakab, András; Sonnevend, Pál: The Bundesbank is under alegal obligation to ignore the PSPP Judgment of the Bundes verfassungs gericht, VerfBlog,2020/5/25, https://verfassungsblog.de/the-bundesbank-is-under-a-legal-obligation-to-ignore-the-pspp-judgment-of-the-bundesverfassungsgericht/, DOI: 10.17176/20200526-013433-0.5/6András Jakab András Jakab is Professor of Constitutional Law at the University ofSalzburg.6/6Pál Sonnevend Pál Sonnevend is a Professor of International Law at the Eötvös LórantUniversity ELTE in Budapest.Explore posts related to this: Other posts about this region: Deutschland, Europa6 comments Join the discussionLICENSED UNDER CC BY NC ND

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The Bundesbank is under a legal obligation to ignore the PSPP Judgment of the Bundesverfassungsgericht

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The Bundesbank is under a legal obligation to ignore the PSPP Judgment of the Bundes­verfassungs­gericht

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The Bundesbank is under a legal obligation to ignore the PSPP Judgment of the Bundesverfassungsgericht