Browsing by Subject "PSPP"

The research paper intends to clarify the limits of the monetary policy of the European Union, which the European Central Bank defines and implements. This is done through explaining the structure and origins of the European Monetary Union and the ECB, as well as monetary policy measures, relevant case law on them and the principles supporting the measures implemented. A short view on the economic foundations and implications is also given. In the European Union, economic policy has been divided into fiscal and monetary policy, the former being in the domain of the Member States and the latter in the domain of the ECB. This division has caused the EU to resort to a wide range of both monetary and economic policy measures and their legality being questioned by national courts. The monetary policy measures of the ECB have included both conventional and unconventional measures. Asset purchase programmes, such as the secondary markets public sector asset purchase programme, the PSPP, are among the unconventional monetary policy measures implemented by the ECB. The most important preliminary judgements by the Court of Justice of the European Union regarding the limits of EU’s monetary policy include the Pringle -judgement, the Gauweiler -judgement and most importantly the Weiss -judgement. The cases focus mainly on the legality of the measures of the ECB and the EU. Through the case law, the research paper intends to analyze whether the said measures are both proportional and in the realm of monetary policy. Additionally, possible violations of the prohibition on monetary financing and deviations from appropriate capital keys are addressed. These questions are analyzed to evaluate the appropriateness of the judgements of the CJEU. The Weiss -case, which investigates the legality of the PSPP, was referred to the CJEU by the German Constitutional Court, the Bundesverfassungsgericht, and led to the German court eventually disagreeing with the CJEU. The contradictory judgement by the German Constitutional Court has led to discussions on the state of the primacy of EU law and its relationship with Member States’ national constitutional identity. In addition to the purchase programmes, also the Recovery and Resilience Facility, the RRF, implemented after the German Constitutional Court’s Weiss -judgement, is presented. The RRF is an example of a measure the EU resorted to when the restrictions on ECB run monetary policy prevented required financial assistance to be given between Member States. The restrictions are also discussed in relation to the case law of the CJEU.