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Advocate General: European Court of Justice should rule that asset purchase programme is valid

In a decision on 4 October, Advocate General Wathelet has proposed that the European Court of Justice should rule that the decision of the European Central Bank (ECB) establishing a programme for the purchase of government bonds on secondary markets is valid.

date:  11/10/2018

See alsoPRESS RELEASE No 145/18

In a decision on 4 October, Advocate General Wathelet has proposed that the European Court of Justice should rule that the decision of the European Central Bank (ECB) establishing a programme for the purchase of government bonds on secondary markets is valid. On 4 March 2015, the ECB put in place a secondary markets public sector asset purchase programme (PSPP), which is one of the four sub-programmes of the Expanded Asset Purchase Programme (APP) announced by the ECB in January 2015. Several groups of individuals have brought before the Bundesverfassungsgericht (Federal Constitutional Court, Germany) constitutional actions in which they claim that the PSPP infringes the prohibition of monetary financing of the Member States and the principle of conferral of powers. Moreover, they claim that the decisions on the PSPP undermine the principle of democracy enshrined in the Grundgesetz (German Basic Law) and, accordingly, undermine German constitutional identity. The European Court of Justice has ruled that the PSPP decision does not infringe upon the prohibition regarding monetary financing, that the ECB did not misuse its powers or manifestly exceed the limits of its discretion, and that the PSPP does not go manifestly beyond what is necessary.