Karlsruhe Not Only Barks, But Finally Bites—Some Remarks on the OMT Decision of the German Constitutional Court

2014 ◽  
Vol 15 (2) ◽  
pp. 321-327 ◽  
Author(s):  
Niels Petersen
Keyword(s):  
Financial Stability ◽  
Press Release ◽  
Constitutional Court ◽  
Bond Markets ◽  
The European Union ◽  
Sovereign Bond ◽  
European Court ◽  
German Constitutional Court ◽  
Technical Features ◽  
Sovereign Bond Markets

On 6 September 2012, the European Central Bank (ECB) published a press release on “Technical features of Outright Monetary Transactions.” In this press release, the ECB announced that it would purchase bonds of Member States participating in the European Financial Stability Facility (EFSF)/European Stability Mechanism (ESM) program on the secondary sovereign bond markets under certain conditions. Furthermore, it gave notice that there were no ex ante quantitative limits on the size of these outright monetary transactions (OMT). This OMT announcement of the ECB was challenged before the German Constitutional Court. In a 6:2 decision, the Court raised doubts with regards to the compatibility of the actions announced in the OMT press release with the rules governing the mandate of the ECB in the Treaty for the Functioning of the European Union (TFEU), and referred the case to the European Court of Justice (ECJ) for a preliminary ruling.

Direct Cooperation Has Begun: Some Remarks on the Judgment of the ECJ on the OMT Decision of the ECB in Response to the German Federal Constitutional Court's First Request for a Preliminary Ruling

2015 ◽  
Vol 16 (4) ◽  
pp. 1025-1048 ◽  
Author(s):  
Sven Simon
Keyword(s):  
Financial Stability ◽  
Constitutional Court ◽  
Preliminary Ruling ◽  
Eu Law ◽  
The European Union ◽  
Critical Question ◽  
Political Problem ◽  
Federal Constitutional ◽  
German Constitutional Court ◽  
Monetary Policy Transmission Mechanism

By its first request for a preliminary ruling, the German Constitutional Court aired its doubts about the lawfulness of the Outright Monetary Transactions (OMTs) program. In this article it is argued that the ECB's pledge in the summer of 2012 to do “whatever it takes” to safeguard the monetary policy transmission mechanism in all countries of the euro area by buying government bonds was generally compatible with EU law. However, it is argued that there is some potential for the ECB to infringe the Treaty on the Functioning of the European Union (TFEU) while acting according to this announcement. The peculiarity of the situation, the author argues, is that we might be dealing with a “self-fulfilling prophecy” in that the ECB announces a particular policy, which might not be compatible with EU law, but the act announced, will never take place because the political problem would have been resolved by the measure previously announced. The critical question in this scenario refers to how a court should react to such a situation. The author argues that a court in such a situation has to show the legal limits of the particular institution, but neither the ECJ nor the German Constitutional Court may replace the central banks' task to maintain financial stability. Finally, a comment is given on how the German Constitutional Court will react to the ECJ's decision in that case.

The German Constitutional Court and Preliminary References—Still a Match not Made in Heaven?

2015 ◽  
Vol 16 (6) ◽  
pp. 1491-1508
Author(s):  
Eva Julia Lohse
Keyword(s):  
European Union ◽  
Constitutional Court ◽  
Eu Law ◽  
The European Union ◽  
Constitutional Courts ◽  
Court Of Justice ◽  
European Court ◽  
German Constitutional Court ◽  
In The Beginning ◽  
The Eu

So far, the German Constitutional Court (Bundesverfassungsgericht, henceforth:BVerfG) has only made a single preliminary reference to the (now) Court of Justice of the European Union (CJEU), despite frequent rulings on matters connected with European Union (EU) Law. Its apparent reluctance seemed odd considering the atmosphere of dialogue and cooperation which prevails between the non-constitutional courts and the EU courts. This situation might, however, have changed with the preliminary reference from January 2014, proving predictions on the perceived “most powerful constitutional court” and its relationship to the EU partly wrong. The legal effects of its preliminary reference on the interpretation of Articles 119, 123, 127 ff. of the Treaty on the Functioning of the European Union (TFEU) and the validity of Outright Monetary Transactions (OMT) by the European Central Bank (ECB) under EU Law are as yet unclear; although the Opinion of the Advocate General Cruz Villalón was delivered in the beginning of 2015, which did not confirm the doubts expressed by theBVerfGabout the conformity of the OMT programme with EU law. Nonetheless, the interpretative scheme and the normative questions as to the reluctance of theBVerfGremain the same after this single referral and offer explanations as to why theBVerfGhad for nearly sixty years not referred a question to the former European Court of Justice (ECJ).

scholarly journals New Strategies for Emerging Domestic Sovereign Bond Markets in the Global Financial Landscape

2007 ◽  
Vol 7 (2) ◽  
pp. 1850111 ◽  
Author(s):  
Hans J. Blommestein ◽  
Javier Santiso
Keyword(s):  
Emerging Markets ◽  
Financial Stability ◽  
Sovereign Debt ◽  
Financial System ◽  
Debt Management ◽  
Bond Markets ◽  
Budget Deficits ◽  
Remarkable Feature ◽  
Sovereign Bond ◽  
Sovereign Bond Markets

The forces shaping the revolution in banking and capital markets have radically changed the financial landscape during the past three decades. A remarkable feature of this changing new landscape has been the astonishing rate of internationalisation of the financial system in the last two decades, with emerging markets becoming increasingly important participants. At times this participation has led to excessive reliance on foreign financing, making the participation of these countries in the global financial system more vulnerable to shifts in expectations and perceptions. The sovereign debt management strategy suffered from many structural weaknesses, failing to take into account international best practices in financing budget deficits and developing domestic government securities markets. Consequently, emerging markets experienced episodes of serious financial crises. Against this background, this article focuses on new and more sophisticated strategies to develop domestic bond markets, taking into account the risk profile, complexities and other constraints of emerging markets. The article's central thesis is that risk-based public debt management and liquid domestic bond markets are important mutually reinforcing strategies for emerging financial markets to attain (1) enhanced financial stability, and (2) a more successful participation in the global financial landscape. It will also be shown that this twin-strategies approach requires taking a macroeconomic policy perspective.

scholarly journals Dynamic integration and network structure of the EMU sovereign bond markets

2018 ◽  
Vol 281 (1-2) ◽  
pp. 297-314 ◽  
Author(s):  
Ahmet Sensoy ◽  
Duc Khuong Nguyen ◽  
Ahmed Rostom ◽  
Erk Hacihasanoglu
Keyword(s):  
Network Structure ◽  
Bond Markets ◽  
Sovereign Bond ◽  
Dynamic Integration ◽  
Sovereign Bond Markets

scholarly journals Volatility spillovers in EMU sovereign bond markets

2015 ◽  
Vol 39 ◽  
pp. 337-352 ◽  
Author(s):  
Fernando Fernández-Rodríguez ◽  
Marta Gómez-Puig ◽  
Simón Sosvilla-Rivero
Keyword(s):  
Bond Markets ◽  
Volatility Spillovers ◽  
Sovereign Bond ◽  
Sovereign Bond Markets

A Constitutional Court for Europe?

2004 ◽  
Vol 6 ◽  
pp. 1-34
Author(s):  
Anthony Arnull
Keyword(s):  
European Union ◽  
European Court Of Justice ◽  
European Council ◽  
Constitutional Court ◽  
The European Union ◽  
Constitutional Order ◽  
Court Of Justice ◽  
European Court ◽  
The Future ◽  
Draft Constitution

The purpose of this article is to consider the effect of the draft Treaty establishing a Constitution for Europe on the European Court of Justice (ECJ). At the time of writing, the future of the draft Constitution is somewhat uncertain. Having been finalised by the Convention on the Future of Europe in the summer of 2003 and submitted to the then President of the European Council, it formed the basis for discussion at an intergovernmental conference (IGC) which opened in October 2003. Hopes that the text might be finalised by the end of the year were dashed when a meeting of the IGC in Brussels in December 2003 ended prematurely amid disagreement over the weighting of votes in the Council. However, it seems likely that a treaty equipping the European Union with a Constitution based on the Convention’s draft will in due course be adopted and that the provisions of the draft dealing with the ECJ will not be changed significantly. Even if either assumption proves misplaced, those provisions will remain of interest as reflecting one view of the position the ECJ might occupy in a constitutional order of the Union.

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