José Luís da Cruz Vilaça

Professor of EU law; Managing Partner of CVA; Former Advocate-General and Judge of the CJEU; Former President of the Court of First Instance of the European Communities (now the General Court of the EU)

The German Constitutional Court, following a complaint by two thousand German citizens, determined that, pending the final decision, the German President, Frank-Walter Steinmeier, could not promulgate the Own Resources Decision that allows the European Commission to issue bonds on the markets to finance the Recovery and Resilience Facility (RRF). The decision had already been approved by the Bundestag and the Bundesrat. The complainants argue that the way in which the RFF is financed violates the EU’s obligation to maintain a balanced budget and consider the planned issuance to be a "flagrant violation of the EU Treaty", namely of article 311 of the Treaty on the Functioning of the EU (TFEU). This is not the first time and probably will not be the last that the Bundesverfassungsgericht questions, and tests, the limits of European competences and the relationship between German and European constitutional sovereignties. It was so with the Solange judgments, in the decades of 1970 and 80; in examining the constitutionality of the law ratifying the Maastricht Treaty in 1992 and in the assessment of the law ratifying the Treaty of Lisbon in 2009; and last but not the least, last year, the Court questioned the European Central Bank’s secondary markets purchase programme for public sector assets, ultimately, drawing upon itself powers conferred by the Treaties exclusively on the Court of Justice of the EU, thus threatening the foundations of an integration legal order established over 70 years. Without the Own Resources Decision, which must be approved by all Member-States, the Commission will not be able to issue the bonds needed to finance the RRF. To avoid adding a serious economic crisis to the pandemic one, aggravated in Europe by the shortcomings of the European Commission’s management of the vaccines purchase, the Bundesverfassungsgericht should provide an urgent response. In a way, the German Constitutional Court has built itself up, in European matters, as a defender of a strict constitutional nationalism, incompatible with Germany’s commitment to European integration. Once again, the long-term future of the European Union will be decided in the short-term response of the German Constitutional Court.

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On 9th December 2020, the Portuguese Constitutional Court (‘PCC’) referred its first question for preliminary ruling to the Court of Justice of the European Union (‘CJEU’). In a case allegedly entailing the need to balance different Treaty rules such as anti-discriminatory EU tax law (Article 110 TFEU) and environmental protection (Article 191 TFEU), the PCC acknowledged its nature as a court against whose decisions there is no judicial remedy under national law and referred the matter to the CJEU. This ruling shall be read in combination with the judgment in Case no. 422/2020 of 15th July 2020, where the PCC recognized the CJEU’s exclusive competence to interpret and assess the validity of EU law, consequently declaring its lack of jurisdiction to do so. After summarizing the main facts of the case, this article aims at analysing its consequences for the relationship between the PCC and the CJEU.

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The trade agreement with the UK has avoided the worst-case scenario, but it is complex and contingent. It establishes freedom of trade in goods, without avoiding the increase in customs bureaucracy. It defines an equality platform, but it provides for compensatory measures (retaliatory?) in case of departure from the standards in force. There is virtually no agreement for services, negotiations must continue. There is a moratorium on fisheries until 2026, with a gradual reduction in catches in the UK UK Exclusive Economic Zone. Europeans can travel without a visa for 90 days, but there is no general agreement on mobility. In essence, the United Kingdom becomes a third country for the European Union and the rules on the application of the Treaty and conflict resolution, based on arbitration and compensatory measures, may result in a permanent negotiation and dispute procedure.

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While the preservation of rights acquired by EU citizens residing in the UK (and vice versa) prior to the withdrawal is ensured by the Withdrawal Agreement signed in January, and entered into force on 1 February 2020, the future of EU-UK relations depends on the outcome of the ongoing negotiations. The outcome of these negotiations remains very uncertain, given the difficulty of reaching a free trade and fisheries agreement, and given the recent British initiative of a bill presented by the British government itself as a partial breach of the Withdrawal Agreement in as far as the movement of goods between Northern Ireland and the EU is concerned. However, the negotiating tactics of the current British government - and of its leader in particular - have become clear: it is a question of the flexing of its muscles for the tug-of-war of the coming weeks. A fair and mutually beneficial trade agreement, while maintaining peace on the hard-won Irish front, is therefore still possible.

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This article analyses the recent decision of the German Constitutional Court, where it considered that the PSPP (Public Sector Purchase Programme) adopted by the ECB (European Central Bank) was ultra vires. The author undertakes an in-depth analysis of the relationship between the European Court of Justice (ECJ) and the constitutional courts of the Member States, also touching upon the fundamental principles of EU law underpinning such judicial cooperation, which is one of the main features of the Union’s judicial architecture. Such analysis leads to the conclusion that the German Constitutional Court misconstrued, inter alia, the principles of conferral and proportionality and threatened the very foundations of the EU legal order, of its integrity and autonomy, by replacing judicial cooperation with judicial confrontation and by ignoring the principle of equality of Member States before the Treaties and the principle of sincere cooperation between the Union and its Member States. Moreover, the decision of the German Constitutional Court defies the exclusive competences conferred to the ECJ by the Treaties, thus undermining the rule of law at the heart of the European Union. It also seriously endangers the independence of the ECB and the ESCB, including the Bundesbank, in performing their tasks in the field of monetary policy. Some final words are devoted to an assessment of the immediate consequences of the judgment, as well as possible ways to overcome it.

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This article analyses the recent decision of the German Constitutional Court, where it considered that the PSPP (Public Sector Purchase Programme) adopted by the ECB (European Central Bank) was ultra vires. The author undertakes an in-depth analysis of the relationship between the European Court of Justice (ECJ) and the constitutional courts of the Member States, also touching upon the fundamental principles of EU law underpinning such judicial cooperation, which is one of the main features of the Union’s judicial architecture. Such analysis leads to the conclusion that the German Constitutional Court misconstrued, inter alia, the principles of conferral and proportionality and threatened the very foundations of the EU legal order, of its integrity and autonomy, by replacing judicial cooperation with judicial confrontation and by ignoring the principle of equality of Member States before the Treaties and the principle of sincere cooperation between the Union and its Member States. Moreover, the decision of the German Constitutional Court defies the exclusive competences conferred to the ECJ by the Treaties, thus undermining the rule of law at the heart of the European Union. It also seriously endangers the independence of the ECB and the ESCB, including the Bundesbank, in performing their tasks in the field of monetary policy. Some final words are devoted to an assessment of the immediate consequences of the judgment, as well as possible ways to overcome it.

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