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The European Central Bank and the German Constitutional Court: Police Patrols and Fire Alarms

Author

Listed:
  • Clément Fontan

    (Institute of Political Science Louvain-Europe, Catholic University of Louvain, Belgium)

  • David Howarth

    (Department of Social Sciences, Institute of Political Science, University of Luxembourg, Luxembourg)

Abstract

In May 2020, a ruling of the German Federal Constitutional Court (FCC) questioned the legality of the Bundesbank’s participation in the European Central Bank’s (ECB’s) Public Sector Purchase Programme. Applying elements of a principal-agent analysis, this article analyses how the FCC ruling presents us with a new understanding of the relationship between the ECB, other EU institutions and Eurozone member states. Existing principal-agent analyses of the ECB focus upon its relations with other EU-level institutions and point to the limited ex ante control mechanisms and efforts to reinforce ex post control mechanisms—notably European Parliament oversight. The FCC ruling and the ECB’s reaction demonstrate the relative importance of national level controls over the ECB agent. This article understands the role of private plaintiffs in Germany as a form of ‘fire alarm’ on ECB policymaking against the background of weak ex post controls at the EU-level.

Suggested Citation

  • Clément Fontan & David Howarth, 2021. "The European Central Bank and the German Constitutional Court: Police Patrols and Fire Alarms," Politics and Governance, Cogitatio Press, vol. 9(2), pages 241-251.
    • Handle: RePEc:cog:poango:v:9:y:2021:i:2:p:241-251
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    References listed on IDEAS

    as
    1. Moritz Rehm, 2021. "Tug of War over Financial Assistance: Which Way Forward for Eurozone Stability Mechanisms?," Politics and Governance, Cogitatio Press, vol. 9(2), pages 173-184.
    2. Giandomenico Majone, 2001. "Two Logics of Delegation," European Union Politics, , vol. 2(1), pages 103-122, February.
    3. Benjamin Braun, 2016. "Speaking to the people? Money, trust, and central bank legitimacy in the age of quantitative easing," Review of International Political Economy, Taylor & Francis Journals, vol. 23(6), pages 1064-1092, November.
    4. Daniela Gabor & Cornel Ban, 2016. "Banking on Bonds: The New Links Between States and Markets," Journal of Common Market Studies, Wiley Blackwell, vol. 54(3), pages 617-635, May.
    5. David Howarth & Peter Loedel, 2005. "The European Central Bank," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-50311-3.
    6. Christopher Gandrud & Mark Hallerberg, 2015. "Does Banking Union Worsen the EU's Democratic Deficit? The Need for Greater Supervisory Data Transparency," Journal of Common Market Studies, Wiley Blackwell, vol. 53(4), pages 769-785, July.
    7. Braun, Benjamin, 2016. "Speaking to the people? Money, trust, and central bank legitimacy in the age of quantitative easing," MPIfG Discussion Paper 16/12, Max Planck Institute for the Study of Societies.
    8. David Howarth & Peter Loedel, 2005. "The European Central Bank," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-50310-6.
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    Cited by:

    1. Anna-Lena Högenauer & Moritz Rehm, 2021. "Reforming the Institutions of Eurozone Governance," Politics and Governance, Cogitatio Press, vol. 9(2), pages 159-162.
    2. Moritz Rehm, 2021. "Tug of War over Financial Assistance: Which Way Forward for Eurozone Stability Mechanisms?," Politics and Governance, Cogitatio Press, vol. 9(2), pages 173-184.

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