An unexpected and unwanted stop to the Recovery Fund. The German Supreme Court has ordered the President of the Republic Frank-Walter Steinmayer not to ratify the ratification law for the European recovery fund, until the court has examined the constitutional legitimacy of the provision, already approved by the two German chambers, the Bundestag and the Bundesrat.
The far-right economist Bernd Lucke, founder of the AfD – the party from which he later left – and then of the Lkr (Liberal-conservative reformers) filed an urgent appeal which made the blockade necessary. The Supreme Court communiqué does not give any indication of the time required for a sentence. Lucke also contested the ECB’s quantitative easing.
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In fact, it is not the first time that the Karlsruhe Court has blocked European monetary and financial integration initiatives, as they could call German taxpayers to answer for decisions taken by other governments. A little less than a year ago, in May 2020, the constitutional body called on the ECB to justify the proportionality of the purchases of securities made through quantitative easing because they escape German political control. As a consequence of the ruling, it would have been possible in the abstract to prohibit the Bundesbank from participating in the program, with limited effects on economic policy.
The ruling, effectively overruled by the launch of the Pepp pandemic program – which the Court itself excluded from the decision – has remained a dead letter. Among other things, it provided for the ECB – which however can answer only to the European Court of Justice – to sell the securities purchased through quantitative easing.
In 2018 the European Court of Justice – called to intervene by the German Constitutional Court itself – had instead defined the purchases as legitimate.