Last week saw a confirmation of the powers of the European Central Bank (ECB) to address the crisis with the delivery of the (non-binding) Opinion in a case before the Court of Justice of the European Union (CJEU, or European Court).
By René Smits
The Advocate General (AG) confirmed the wide discretion, which the ECB has when taking unconventional monetary policy measures. At the same time, the AG suggested the Court that the ECB be required, when implementing such measures, to be fully transparent in the reasons behind them (motivation requirement) and to respect the proportionality principle (the measures are to remain well within the limits of the necessary to obtain the stated goal). He warned that the ECB’s involvement in economic policy setting and monitoring should end in respect of Member States whose bonds the ECB would buy under such unconventional measures: an end to the troika (troixit). The AG addressed the relationship between the CJEU and the highest court of the largest Member State, which had referred the question to be decided by the European Court. The AG opinion should be seen against the background of a battle for supremacy of the law (Union versus State law), and a battle for the public’s mind in Germany on the need of unconventional measures, as well as their role in preserving the euro and the composition of the currency union. The Opinion will support the ECB in deciding on further unconventional monetary policy measures, and underlines the primacy of EU law.