The Federal Constitutional Court has settled the long-running dispute over the ECB's bond purchase program PSPP.

On Tuesday, the Karlsruhe judges rejected further motions from former CSU politician Peter Gauweiler and AfD co-founder Bernd Lucke, pointing out that the Bundestag and the federal government had sufficiently dealt with the controversial program after the fundamental decision of May 2020.

The two constitutional organs had a margin of appreciation that, in the opinion of the constitutional judges, has not been exceeded.

The Second Senate therefore sees no reason to take action itself.

Corinna Budras

Business correspondent in Berlin.

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    If the judges had decided otherwise, further upheavals in the relationship between Germany and the European Union would have been inevitable. With their surprising landmark ruling, the judges had for the first time identified an “erupting legal act” in connection with the multi-billion euro ECB bond purchase program under the name of the “Public Sector Purchase Program” (PSPP) and thus assumed responsibility in a European context.

    The central argument at the time was that it was not apparent that the ECB had examined the program for its proportionality and therefore looked in particular at the negative consequences for the finances of the member states, private households, savers and borrowers, the banking sector and companies.

    The European Court of Justice had also neglected its role as a supervisory authority, which is why the Federal Constitutional Court was forced to intervene at the time.

    It condemned the German constitutional organs to work towards such a proportionality test.

    The applicants followed up without success 

    In their decision on Tuesday, the Karlsruhe judges acknowledged that the ECB then dealt with the proportionality of the PSPP at the beginning of June.

    Subsequently, the Bundestag determined in July that this examination met the requirements of the judgment.

    The applicants, however, doubted that the concerns could be completely allayed.

    They called for an in-depth examination of the proportionality test by the ECB.

    In addition, the Bundesbank should be prevented from participating in the implementation of the program.  

    The Federal Constitutional Court has now rejected this. The Federal Government and Bundestag have neither remained inactive, nor have they taken measures that are obviously unsuitable or completely inadequate to fulfill the obligation resulting from the judgment, it says in the decision.