EU launches proceedings over top German court's ECB ruling

FILE - In this Sept.22, 2020 file photo red lights shine on the European Central Bank while the city's skyline is reflected in a golden architectural feature on top of a hotel in Frankfurt, Germany, Tuesday, Sept. 22, 2020. The European Union on Wednesday launched proceedings against Germany over a ruling by the top German court last year on a European Central Bank bond-buying program, which broke with a verdict from the EU's own top court. Brussels says that constitutes a serious precedent.(AP Photo/Michael Probst, file) (Michael Probst, Copyright 2020 The Associated Press. All rights reserved)

BERLIN – The European Union on Wednesday launched proceedings against Germany over a ruling by the top German court last year on a European Central Bank bond-buying program that broke with a verdict from the EU's own top court.

Brussels says that “constitutes a serious precedent.”

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Germany's Federal Constitutional Court in May last year gave the ECB three months to prove that its key bond-buying program was justified and appropriate. It ruled that, if the bank failed to do so, Germany’s own national central bank could no longer participate in the program -- and would even have to sell bonds that it had purchased.

The issue has since been resolved without disruption to the ECB's stimulus efforts. But the ruling upset Brussels because the German court broke with the EU's own top court, the European Court of Justice, which had approved the bond purchases. In the EU's judgment, that broke the principle of the primacy of EU law in the 27-nation bloc.

The EU's executive arm, the European Commission, decided Wednesday to send a formal notice to Germany for “violation of fundamental principles of EU law,” giving it two months to reply. If it isn't satisfied with Berlin's response, it could then take the case to the European Court of Justice.

“The Commission considers that the judgment of the German Constitutional Court constitutes a serious precedent, both for the future practice of the German Constitutional Court itself, and for the supreme and constitutional courts and tribunals of other member states,” the EU executive said in a statement.

The German government said it had taken note of the EU's move but was otherwise tightlipped.

“We will look closely at the concerns expressed by the European Commission and then, as the procedure foresees, respond to them in writing,” Chancellor Angela Merkel's spokesman, Steffen Seibert, told reporters in Berlin. “Beyond that, I can't give you any information at this point.”