GIS Statement by Prince Michael of Liechtenstein
Two legal challenges to the EU central bank’s most controversial policies have been working their way through Germany’s Federal Court of Justice, the country’s supreme court equivalent. In one of the cases, the justices in Karlsruhe already ruled that the authority of the EU Banking Union ought to be limited. A verdict on the legality of the EU’s “quantitative easing” policy, under German law, is expected soon. This could prove to be the moment of truth not only for Germany.
Two cases have been filed with the Bundesgerichtshof, the highest court in Germany’s judicial system. One of them questioned the constitutionality of the Banking Union, initiated in 2012 as a response to the eurozone crisis, which transfers some of the responsibility for banking policy from the national level to that of the European Union. Europolis, a Berlin-based think tank created by lawyer and public finance Professor Marcus C. Kerber, was behind that suit. The other case, submitted by a former Bavarian politician and lawyer Peter Gauweiler, challenges the legality of the European Central Bank’s quantitative easing (QE) policy.
The Banking Union, institutionally attached to the ECB, is tasked with supervising the largest European banks – those which have been dubbed “system-relevant” (insolvency of a “system-relevant” institution may threaten a financial system’s stability). The union also supervises the liquidation of such banks when they fail.
The main argument for the transfer of the responsibility for these banks to the ECB level has been that the biggest banks typically operate in more than one eurozone country.
Power grab and ‘easy money’
The plaintiffs in the federal court argued that too much power was shifted from the national supervision to the ECB, which violates the Lisbon Treaty (the constitutional framework of the European Union) and, particularly, the German constitution. They also pointed out that the German authorities and parliament had lost control of the use of the “Bankensonderabgabe” bank levy (the German banks’ mandatory contributions to a deposit protection fund) to a supranational, technocratic and democratically unaccountable authority controlled by the ECB …
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The Euro and the German Constitution
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