OPINION OF ADVOCATE GENERAL

CRUZ VILLALÓN

delivered on 14 January 2015 ( 1 )

Case C‑62/14

Peter Gauweiler

Bruno Bandulet

Wilhelm Hankel

Wilhelm Nölling

Albrecht Schachtschneider

Joachim Starbatty

Roman Huber and Others

Johann Heinrich von Stein and Others

and

Fraktion DIE LINKE im Deutschen Bundestag

v

Deutscher Bundestag

(Request for a preliminary ruling from the Bundesverfassungsgericht (Germany))

‛Economic and monetary policy — Validity of the decision of the Governing Council of the European Central Bank of 6 September 2012 — Technical features of Outright Monetary Transactions (OMTs) — National review of the constitutionality of European Union acts — Ultra vires acts — Constitutional identity — Sincere cooperation — Admissibility — Nature of an act open to legal challenge in the context of preliminary ruling proceedings — Communications strategy of the European Central Bank — Powers of the European Central Bank — Price stability — Restoring the monetary policy transmission channels — Articles 119 TFEU and 127(1) and (2) TFEU — Exceptional circumstances — Unconventional monetary policy measures — Principle of proportionality — Article 5(4) TEU — Article 123 TFEU — Prohibition of monetary financing of Member States in the euro area’

Table of contents

I – Legal framework A – EU legal framework B – National legal framework II – The facts and proceedings before the national court III – The request to the Court of Justice for a preliminary ruling IV – Preliminary consideration: The ‘functional’ difficulty of the request for a preliminary ruling, when placed in the context of the relevant case-law of the BVerfG V – Admissibility VI – The questions referred for a preliminary ruling A – The first question referred: Articles 119 TFEU and 127(1) and (2) TFEU and the limits of the ECB’s monetary policy 1. Position of the interested parties 2. Analysis a) Preliminary observations i) The status and mandate of the ECB ii) Unconventional monetary policy measures and classification of the OMT programme as such – The ECB’s view of unconventional monetary policy measures – The OMT programme as an unconventional monetary policy measure b) The ECB’s competences and the OMT programme i) The OMT programme and the economic policies of the Union and the Member States as a limit on the ECB’s competences – The Union’s economic and monetary policies – The OMT programme in the light of the criteria for defining the Union’s economic and monetary policies – The objectives of the OMT programme – Conditionality and parallelism – Selectivity – Circumvention – Intermediate conclusion ii) Review of the proportionality of the OMT programme (Article 5(4) TEU) – Statement of the reasons concerning the circumstances justifying the OMT programme, the premiss of proportionality – The suitability test – The necessity test – The test of proportionality stricto sensu – Intermediate conclusion c) Answer to the first question referred for a preliminary ruling B – The second question referred: compatibility of the OMT programme with Article 123(1) TFEU (prohibition of monetary financing of the States of the euro area) 1. Position of the parties taking part in these proceedings 2. Analysis a) The prohibition of monetary financing of the Member States (Article 123(1) TFEU) and the purchase of government bonds by the ECB b) The OMT programme and its compatibility with the prohibition laid down in Article 123(1) TFEU i) Waiver of rights and pari passu status ii) Default risk iii) Holding the bonds until maturity iv) Time of purchase v) Encouragement to purchase newly issued bonds 3. Answer to the second question referred for a preliminary ruling VII – Conclusion

1. By a press release issued after the meeting of its Governing Council on 5 and 6 September 2012, the European Central Bank gave details of a decision outlining a programme for the purchase of government bonds issued by States of the euro area — transactions which were to be known as Outright Monetary Transactions (OMTs). The press release set out the basic features of the programme for purchasing government bonds. However, adoption of the legal instruments regulating the programme was postponed and those instruments have still not been adopted today.

2. In its press release, the European Central Bank (‘the ECB’ or ‘the Bank’) gave notice of its intention to purchase on secondary markets, subject to certain conditions, government bonds issued by States in the euro area. In brief, the ECB made application of the programme conditional upon the States concerned being subject to a financial support programme of the European Financial Stability Facility or the European Stability Mechanism, provided that such a programme included the possibility of primary market purchases. It was also announced that transactions under the OMT programme were to be focused on the shorter part of the yield curve, with no ex ante quantitative limits being set, and that the Eurosystem accepted the same (pari passu) treatment as private creditors, whilst an undertaking was given that liquidity created would be fully sterilised.

3. The OMT programme was thus created in the context of, and in response to, a situation regarded as exceptional for the viability of the ECB’s monetary policy. The international financial crisis which started in 2008 had, by 2010, become a sovereign debt crisis for various euro area States. In the summer of 2012, faced with investors’ lack of confidence in whether the euro could survive, the financial situation of various Member States of the euro area was becoming unsustainable as a result of the apparently unstoppable increases in the risk premia applied to their government bonds. The ‘reversibility’ of the euro and the consequent return to national currencies seemed destined to become a self-fulfilling prophecy. It was in that precise context that the ECB made its announcement about the OMT programme, which was generally perceived as giving concrete expression to the pledge which its President, Mr Draghi, had given a few weeks beforehand to do, within the ECB’s mandate, ‘whatever it takes’ to restore confidence in the single currency.

4. For the first time in its history the Bundesverfassungsgericht (Germany’s Federal Constitutional Court; ‘the BVerfG’) has made a reference to the Court of Justice under Article 267 TFEU and has done so in order to raise the question of the legality of the OMT programme. As will be seen below, the questions raised by the BVerfG give rise to difficulties of interpretation of utmost importance, which the Court of Justice will have to resolve.

5. A first point that should be made about this case is that the BVerfG has made its request for a preliminary ruling in the context of what it classifies as an ultra vires review of European Union (EU) acts which have consequences for the ‘constitutional identity’ of the Federal Republic of Germany. The BVerfG’s starting point is an initial finding that the act of the ECB at issue is unlawful under national constitutional law, as well as under EU law, but, before proceeding any further with its assessment, it has decided to bring the matter before the Court of Justice so that the latter may give a ruling on that act from the perspective of EU law.

6. The Court of Justice must also address a question of admissibility, which concerns the actionable nature of a decision only the basic features of which were set out in a press release. Although it may, on the face of it, appear to be a simple press release which it is hard to imagine forming the subject-matter of a review of validity, the circumstances of the present case, together with the special role played by public communication in central bank activity, might be grounds for reaching a different conclusion.

7. As regards the substance of the case, the Court of Justice is confronted with the difficulties which extraordinary circumstances have long presented for public law. Against a background of the possible disintegration of the euro area, it is faced with a question about the powers of the ECB, an institution which, unlike other central banks, is subject to a particularly restricted mandate. The ECB has argued that the OMT programme is a proper instrument for dealing with exceptional circumstances, since, despite its ‘unconventional’ nature and the risks it entails, its objective is merely to do what has to be done in order to restore the ECB’s ability to make effective use of its monetary policy instruments. By contrast, the complainants and the applicant in the main proceedings (hereinafter referred to together as ‘the applicants in the main proceedings’), like the referring court itself, have doubts as to whether that is the real aim of the OMT programme, since in their view the ultimate objective of that programme is to transform the ECB into a ‘lender of last resort’ for the States of the euro area.

8. This situation has led the BVerfG to share with the Court of Justice its doubts as to whether the OMT programme is compatible with the Treaties. First, it asks whether that programme is an economic policy measure — and therefore beyond the scope of the ECB’s mandate — rather than a monetary policy measure. Second, it questions whether the measure in issue observes the prohibition on monetary financing laid down in Article 123(1) TFEU.

I – Legal framework

A – EU legal framework

9. Title VIII of Part Three of the FEU Treaty, which is entitled ‘Economic and Monetary Policy’, opens with the following overarching provision: ‘Article 119 1. For the purposes set out in Article 3 of the Treaty on European Union, the activities of the Member States and the Union shall include, as provided in the Treaties, the adoption of an economic policy which is based on the close coordination of Member States’ economic policies, on the internal market and on the definition of common objectives, and conducted in accordance with the principle of an open market economy with free competition. 2. Concurrently with the foregoing, and as provided in the Treaties and in accordance with the procedures set out therein, these activities shall include a single currency, the euro, and the definition and conduct of a single monetary policy and exchange-rate policy the primary objective of both of which shall be to maintain price stability and, without prejudice to this objective, to support the general economic policies in the Union, in accordance with the principle of an open market economy with free competition. 3. These activities of the Member States and the Union shall entail compliance with the following guiding principles: stable prices, sound public finances and monetary conditions and a sustainable balance of payments.’

10. The FEU Treaty then lays down a provision prohibiting the monetary financing of the Member States, which is worded as follows: ‘Article 123 1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as “national central banks”) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments. 2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.’

11. The objectives and basic tasks of the ECB are set out in the FEU Treaty in the following terms: ‘Article 127 1. The primary objective of the European System of Central Banks (hereinafter referred to as “the ESCB”) shall be to maintain price stability. Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union. The ESCB shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article 119. 2. The basic tasks to be carried out through the ESCB shall be: — to define and implement the monetary policy of the Union, — to conduct foreign-exchange operations consistent with the provisions of Article 219, — to hold and manage the official foreign reserves of the Member States, — to promote the smooth operation of payment systems. …’

12. Article 130 TFEU provides for and ensures the independence of the ECB as follows: ‘When exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and of the ECB, neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. The Union institutions, bodies, offices or agencies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the European Central Bank or of the national central banks in the performance of their tasks.’

13. Protocol No 4 on the Statute of the European System of Central Banks and of the European Central Bank sets out the instruments of monetary policy available to the ECB; the following of which should be highlighted for the purposes of the present case: ‘Article 18 Open market and credit operations 18.1. In order to achieve the objectives of the ESCB and to carry out its tasks, the ECB and the national central banks may: — operate in the financial markets by buying and selling outright (spot and forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments, whether in euro or other currencies, as well as precious metals; — conduct credit operations with credit institutions and other market participants, with lending being based on adequate collateral. 18.2. The ECB shall establish general principles for open market and credit operations carried out by itself or the national central banks, including for the announcement of conditions under which they stand ready to enter into such transactions.’

14. In 1993, before the ECB was established and in the course of the process of transition to economic and monetary union, the Council adopted Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Articles 104 and 104b(1) of the Treaty [Article 123 TFEU] (OJ 1993 L 332, p. 1). For the purposes of these proceedings, attention should be drawn to the following statements and provisions of that regulation: ‘… Whereas Member States must take appropriate measures to ensure that the prohibitions referred to in Article 104 of the Treaty are applied effectively and fully; whereas, in particular, purchases made on the secondary market must not be used to circumvent the objective of that Article;’ … Article 1 1. For the purposes of Article 104 of the Treaty: (a) “overdraft facilities” means any provision of funds to the public sector resulting or likely to result in a debit balance; (b) “other type of credit facility” means: (i) any claim against the public sector existing at 1 January 1994, except for fixed-maturity claims acquired before that date; (ii) any financing of the public sector’s obligations vis-à-vis third parties; (iii) without prejudice to Article 104(2) of the Treaty, any transaction with the public sector resulting or likely to result in a claim against that sector. …’

B – National legal framework

15. For the purposes of these proceedings, attention should be drawn to the following provisions of the Basic Law of the Federal Republic of Germany: ‘Article 1 1. Human dignity shall be inviolable. It shall be the duty of every public authority to observe and protect it. 2. The German people therefore acknowledge inviolable and inalienable human rights as the basis of every community, of peace and of justice in the world. 3. The following basic rights shall bind the legislature, the executive and the judiciary as directly applicable law. … Article 20 1. The Federal Republic of Germany is a democratic and social federal state. 2. All state authority is derived from the people. It shall be exercised by the people through elections and other votes and through specific legislative, executive and judicial bodies. 3. The legislature shall be bound by the constitutional order, the executive and the judiciary by law and justice. … Article 23 1. With a view to establishing a united Europe, the Federal Republic of Germany shall participate in the development of the European Union that is committed to democratic, social and federal principles, to the rule of law, and to the principle of subsidiarity, and that guarantees a level of protection of basic rights essentially comparable to that afforded by this Basic Law. To this end the Federation may transfer sovereign powers by a law with the consent of the Bundesrat. The establishment of the European Union, as well as changes in its founding Treaties and in comparable regulations which amend or supplement this Basic Law, or make such amendments or supplements possible, shall be subject to paragraphs 2 and 3 of Article 79. … Article 79 … 3. Amendments to this Basic Law which affect the division of the Federation into Länder, their participation on principle in the legislative process, or the principles laid down in Articles 1 and 20 shall be inadmissible. … Article 88 The Federation shall establish a note-issuing and currency bank as the Federal Bank. Within the framework of the European Union, its responsibilities and powers may be transferred to the European Central Bank, which is independent and committed to the overriding goal of assuring price stability.’

16. The BVerfG has developed a body of case-law pursuant to which it carries out a review of the constitutionality of acts of the institutions and bodies of the European Union when the acts concerned are obviously ultra vires or affect ‘constitutional identity’, as it results from the ‘eternity clause’ in Article 79(3) of the German Basic Law.

17. As regards the review of ultra vires acts, referred to as an ‘ultra vires review’, the BVerfG stated, in its judgment of 6 July 2010 in Honeywell, that it is to be conducted in a manner that is amicable to EU law. The BVerfG has also pointed out that in an ultra vires review decisions of the Court of Justice are to be recognised as a binding interpretation of EU law.

18. For the BVerfG, an ultra vires review of an EU act takes place only when it is apparent that, in adopting an act, the European institutions and bodies have acted in a way that is beyond the scope of the powers conferred on them, provided that, taking account of the principle of conferral and the principle of legality that is a feature of a State governed by the rule of law, the breaches of those powers are ‘sufficiently serious’. ( 2 )

II – The facts and proceedings before the national court

19. Between early 2010 and early 2012, the Heads of State and Government of the European Union and of the euro area adopted a number of measures intended to counter the severe effects of the financial crisis afflicting the world economy. As the financial crisis turned into a sovereign debt crisis in various Member States, it was decided, amongst other initiatives, to establish on a permanent basis the European Stability Mechanism, the purpose of which is to safeguard the financial stability of the euro area by granting financial assistance to any of the States participating in the Mechanism.

20. Despite the efforts of the European Union (‘the Union’) and the Member States, the risk premia for bonds of various euro-area States rose sharply in the summer of 2012. In the face of investors’ doubts about the survival of monetary union, the representatives of the Union and of the States of the euro area repeatedly stressed that the single currency was irreversible. It was at that time that the President of the ECB, in words that were subsequently repeated over and over again, stated that he would, within his mandate, do whatever it took to preserve the euro. ( 3 )

21. Some weeks later, according to the minutes of the 340th meeting of the Governing Council of the ECB on 5 and 6 September 2012, the Council approved the main parameters of the programme of outright monetary transactions in the secondary sovereign bond markets, formally to be known as ‘Outright Monetary Transactions’. As is clear from the written observations submitted by the ECB in these proceedings, approval was also given at that meeting to a draft Decision on outright monetary transactions and repealing Decision ECB/2010/5, as well as to a draft Guideline on the implementation of outright monetary transactions. Both drafts were subsequently amended at the meetings of the Governing Council on 4 October and 7 and 8 November 2012.

22. On 6 September 2012 at the press conference after the meeting of the Governing Council, the President of the ECB gave details of the main parameters of the OMT programme, which were also set out in the press release of the same date made available in English on the ECB’s website. That press release is the document in which the technical features of the OMT programme were set out; those features are described as follows: ‘As announced on 2 August 2012, the Governing Council of the European Central Bank (ECB) has today taken decisions on a number of technical features regarding the Eurosystem’s outright transactions in secondary sovereign bond markets that aim at safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy. These will be known as Outright Monetary Transactions (OMTs) and will be conducted within the following framework: Conditionality A necessary condition for Outright Monetary Transactions is strict and effective conditionality attached to an appropriate European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) programme. Such programmes can take the form of a full EFSF/ESM macroeconomic adjustment programme or a precautionary programme (Enhanced Conditions Credit Line), provided that they include the possibility of EFSF/ESM primary market purchases. The involvement of the IMF shall also be sought for the design of the country-specific conditionality and the monitoring of such a programme. The Governing Council will consider Outright Monetary Transactions to the extent that they are warranted from a monetary policy perspective as long as programme conditionality is fully respected, and terminate them once their objectives are achieved or when there is non-compliance with the macroeconomic adjustment or precautionary programme. Following a thorough assessment, the Governing Council will decide on the start, continuation and suspension of Outright Monetary Transactions in full discretion and acting in accordance with its monetary policy mandate. Coverage Outright Monetary Transactions will be considered for future cases of EFSF/ESM macroeconomic adjustment programmes or precautionary programmes as specified above. They may also be considered for Member States currently under a macroeconomic adjustment programme when they will be regaining bond market access. Transactions will be focused on the shorter part of the yield curve, and in particular on sovereign bonds with a maturity of between one and three years. No ex ante quantitative limits are set on the size of Outright Monetary Transactions. Creditor treatment The Eurosystem intends to clarify in the legal act concerning Outright Monetary Transactions that it accepts the same (pari passu) treatment as private or other creditors with respect to bonds issued by euro area countries and purchased by the Eurosystem through Outright Monetary Transactions, in accordance with the terms of such bonds. Sterilisation The liquidity created through Outright Monetary Transactions will be fully sterilised. Transparency Aggregate Outright Monetary Transaction holdings and their market values will be published on a weekly basis. Publication of the average duration of Outright Monetary Transaction holdings and the breakdown by country will take place on a monthly basis. Securities Markets Programme Following today’s decision on Outright Monetary Transactions, the Securities Markets Programme (SMP) is herewith terminated. The liquidity injected through the SMP will continue to be absorbed as in the past, and the existing securities in the SMP portfolio will be held to maturity.’

23. Various German individuals brought proceedings for the protection of fundamental rights (constitutional complaints) before the BVerfG, which they based on the failure of the Federal German Government to bring an action for annulment before the Court of Justice against the announcement of 6 September 2012 concerning the OMT programme.

24. Similarly, Fraktion DIE LINKE im Deutschen Bundestag (‘Die Linke’), a political group with parliamentary representation in the Bundestag, brought proceedings before the BVerfG on the ground of a conflict between constitutional bodies, seeking a declaration that the Bundestag should work to achieve the annulment of the OMT programme announced by the ECB on 6 September 2012.

III – The request to the Court of Justice for a preliminary ruling

25. The request for a preliminary ruling from the BVerfG, which was lodged at the Court Registry on 10 February 2014, was made in the proceedings brought by the individual applicants referred to above and by the parliamentary group Die Linke.

26. The following questions have been raised by the referring court: ‘(1) (a) Is the decision of the Governing Council of the European Central Bank of 6 September 2012 on Technical features of Outright Monetary Transactions incompatible with Article 119 TFEU and Article 127(1) and (2) TFEU and with Articles 17 to 24 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank because it exceeds the monetary policy mandate of the European Central Bank laid down in the abovementioned provisions and encroaches upon the competence of the Member States? Is the mandate of the European Central Bank exceeded in particular because the decision of the Governing Council of the European Central Bank of 6 September 2012 (aa) is linked to economic assistance programmes of the European Financial Stability Facility or of the European Stability Mechanism (conditionality)? (bb) provides for the purchase of government bonds of selected Member States only (selectivity)? (cc) provides for the purchase of government bonds of programme countries in addition to assistance programmes of the European Financial Stability Facility or of the European Stability Mechanism (parallelism)? (dd) could undermine the limits and conditions laid down by assistance programmes of the European Financial Stability Facility or of the European Stability Mechanism (circumvention)? (b) Is the decision of the Governing Council of the European Central Bank of 6 September 2012 on Technical features of Outright Monetary Transactions incompatible with the prohibition of monetary financing enshrined in Article 123 TFEU? Is compatibility with Article 123 TFEU precluded in particular by the fact that the decision of the Governing Council of the European Central Bank of 6 September 2012 (aa) does not provide for quantitative limits for government bond purchases (volume)? (bb) does not provide for a time gap between the issue of government bonds on the primary market and their purchase by the European System of Central Banks on the secondary market (market pricing)? (cc) allows all purchased government bonds to be held to maturity (interference with market logic)? (dd) does not contain any specific requirements for the credit standing of the government bonds to be purchased (default risk)? (ee) provides for the same treatment of the European System of Central Banks as private or other holders of government bonds (debt cut)? (2) In the alternative, in the event that the Court does not consider the decision of the Governing Council of the European Central Bank of 6 September 2012 on Technical features of Outright Monetary Transactions, qua act of an EU institution, to be an appropriate object for a request pursuant to point (b) of the first paragraph of Article 267 TFEU: (a) Are Article 119 TFEU and Article 127 TFEU and Articles 17 to 24 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank to be interpreted as permitting the Eurosystem, alternatively or cumulatively, (aa) to make government bond purchases conditional on the existence of and compliance with economic assistance programmes of the European Financial Stability Facility or of the European Stability Mechanism (conditionality)? (bb) to purchase government bonds of selected Member States only (selectivity)? (cc) to purchase government bonds of programme countries in addition to assistance programmes of the European Financial Stability Facility or of the European Stability Mechanism (parallelism)? (dd) to undermine the limits and conditions laid down by assistance programmes of the European Financial Stability Facility or of the European Stability Mechanism (circumvention)? (b) Having regard to the prohibition of monetary financing, is Article 123 TFEU to be interpreted as permitting the Eurosystem, alternatively or cumulatively, (aa) to purchase government bonds without quantitative limits (volume)? (bb) to purchase government bonds without a minimum time gap from their issue on the primary market (market pricing)? (cc) to hold all purchased government bonds to maturity (interference with market logic)? (dd) to purchase government bonds without minimum credit standing requirements (default risk)? (ee) to accept the same treatment of the European System of Central Banks as private and other holders of government bonds (debt cut)? (ff) to influence pricing, by communicating the intention to purchase or otherwise, coinciding with the issue of government bonds by Member States of the euro area (encouragement to purchase newly issued bonds)?’

27. Written observations have been submitted by the individual complainants in the main proceedings for the protection of basic rights and by Die Linke, as well as by the Federal Republic of Germany, the Hellenic Republic, the Republic of Cyprus, the Portuguese Republic, the Republic of Poland, the French Republic, the Italian Republic, the Kingdom of the Netherlands, the Kingdom of Spain, Ireland and the Republic of Finland, the ECB, the European Parliament and the European Commission.

28. As a preliminary matter, I must point out that the European Parliament, although it has submitted written and oral observations, is not entitled to do so in proceedings such as these. Since these proceedings involve a reference for a preliminary ruling concerning validity in which the act in issue has not been adopted by the European Parliament, Article 23 of the Statute of the Court of Justice does not enable the Parliament to participate in these proceedings. I therefore take the view that the Court of Justice should not take into account the written and oral submissions put forward by the European Parliament.

29. The hearing was held on 14 October 2014. Apart from the Republic of Cyprus and the Republic of Finland, all the interested persons that had previously submitted written observations participated in the hearing.

IV – Preliminary consideration: The ‘functional ’ difficulty of the request for a preliminary ruling, when placed in the context of the relevant case-law of the BVerfG

30. A singular feature of the order for reference in these proceedings is that it devotes an extensive introductory section to national legislative provisions and national case-law which are considered to be relevant. That singularity naturally does not lie in the fact that national legislation is cited — in this case a small number of constitutional provisions (Articles 20, 23, 38, 79 and 88 of the Basic Law of the Federal Republic of Germany; ‘the BL’) — but rather in the very full presentation of the BVerfG’s case-law concerning the constitutional basis and limits of the Federal Republic of Germany’s integration in the European Union. In a section of the order for reference dealing with the ‘case-law of the BVerfG’, ( 4 ) the latter interprets the scope of its own previous case-law as contained essentially in the judgments of 12 October 1993 (Maastricht), ( 5 )30 June 2009 (Lisbon) ( 6 ) and 6 July 2010 (Honeywell), ( 7 ) a direct precedent for the order under consideration here.

31. It might be thought that, as in so many other cases, this introductory section of the order for reference serves no purpose other than to help the Court of Justice to place the questions raised in their proper context. The section in question certainly does that, although it cannot be said that it confines itself to summarising the national case-law concerned. It also contains appraisals that cannot be regarded as being of minor importance. ( 8 )

32. The fact that the background of national case-law is presented in that way, with its significance being explained as a preliminary matter to the Court of Justice, has, to my mind, immediate consequences for the function of the present request for a preliminary ruling. I would stress at the outset that all that case-law is sufficiently complex for me to frame my own reading of it in extremely cautious terms. The dissenting opinions that are attached to the order for reference show that there are different views on how the rules in Honeywell are to be applied to the present case. ( 9 )

33. Stated in the simplest possible way, the following points may be gleaned from the section of the order for reference dealing with national case-law. In certain circumstances, which it is not essential to consider in detail at this point, when the Court of Justice answers a question raised in respect of a given EU act, as would be the case here, that answer is not necessarily a determining factor in deciding the case in the main proceedings. Rather, if the criterion constituted by EU law has been satisfied, another criterion for assessing validity, which is a matter for the BVerfG, could possibly be applied to the same contested act: that of the national constitution itself.

34. More specifically, a constitutional criterion of that kind, which is subsequently used by the BVerfG in its assessment, is said to consist in both the unalterable core content of the national constitution (‘constitutional identity’, as enshrined in Article 79(3) BL), and the principle of conferral of powers (with the logical consequences for ‘ultra vires’ EU acts that follow from that principle implicit in Article 23(1) BL). It seems that these two constitutional criteria, far from being mutually exclusive, are each able to provide support for the other, ( 10 ) as appears to be the case here. Such criteria for reviewing validity (the so-called ‘identity review’ and the ‘ultra vires review’), by definition, may be applied only by the BVerfG itself. ( 11 )

35. That being so, it is not surprising that various Member States participating in these proceedings (the Kingdom of the Netherlands, the Italian Republic and the Kingdom of Spain) have, more or less emphatically, questioned, or even denied, the admissibility of the present reference. Simplifying matters once again, it is argued that a reference for a preliminary ruling is not a procedural mechanism intended to make it easier for national courts or tribunals to carry out their own review of the validity of EU acts, such as the review by the BVerfG in the present case, but is instead intended to ensure that the review of validity is carried out before the judicial body having exclusive jurisdiction for that purpose: namely the Court of Justice. In the same vein, it has been argued that, if a national court or tribunal were to reserve for itself the last word on the validity of an EU act, the preliminary ruling procedure would then be merely advisory in nature, and its function in the scheme of actions provided for by the Treaties would thus be severely undermined. ( 12 )

36. In short, a national court should not be able to request a preliminary ruling from the Court of Justice if its request already includes, intrinsically or conceptually, the possibility that it will in fact depart from the answer received. The national court should not be able to proceed in that way because Article 267 TFEU cannot be regarded as providing for such a possibility. ( 13 )

37. Having thus explained what I am classifying as the ‘functional’ difficulty of the present request for a preliminary ruling, I would add that, in my view, the Court of Justice must address this difficulty when responding to the questions raised. I should, however, also point out that it must do so only in so far as is essential for the purposes of the present case, that is to say, in so far as this difficulty has consequences for whether the reference may proceed. Neither the significance nor the possible consequences of the aforementioned case-law of the BVerfG can be denied, as has long been made abundantly clear in a wide range of academic writing. ( 14 ) By way of example, it is sufficient to refer to the matters mentioned in point 30 of the order for reference, according to which the concepts of ‘constitutional identity’ and ‘ultra vires review’ are part of the constitutional traditions of many Member States.

38. As regards the last-mentioned point, it is the case that a number of national constitutional and supreme courts, in quite different ways but with an essentially precautionary aim, have found it appropriate to discuss or allude to the possibility, normally conceived of as a last resort, ( 15 ) of — stated in the most general possible terms — a breakdown in the European ‘constitutional compact’ underlying the integration process, specifically because of the conduct of one of the EU institutions.

39. As with other questions of similar significance, it does not seem to me to be essential for the purposes of these proceedings for the Court of Justice to go into the reasons why those courts have made such statements, which, I repeat, normally pertain to a situation envisaged as a last resort; nor is it necessary to go into the extent to which they are general at Member State level or the extent to which they overlap with the views put forward by the BVerfG. The cautious approach of ‘one case at a time’ ( 16 ) should also be adopted on this occasion. I shall try to explain why I believe that is so.

40. First of all, the fact that, in the course of a long history, this is the first time that the BVerfG has made a reference to the Court of Justice for a preliminary ruling does not call for particular comment on my part, except to observe that it provides confirmation of something which is starting to become more normal. The intensification, as it were, of the EU legal order is prompting the courts of the Member States with a specifically constitutional role to behave increasingly as courts or tribunals within the meaning of Article 267 TFEU. ( 17 ) The unique position of the constitutional court in most Member States has in the past been a sufficient explanation of why the cases in which such courts have brought matters before the Court of Justice have been exceptional, both for the purposes of judicial assistance and for the purposes of cooperation to ensure the uniform interpretation of EU law. The general picture is starting to change and the present reference perhaps bears that out.

41. At the same time, however, the introductory section of the order for reference reveals the ‘exceptional nature’ of the BVerfG’s initiative. It is not at all clear that the making of this request for a preliminary ruling is to be seen as part of the process of ‘normalisation’ in the sense I have indicated above.

42. In fact, it follows from the case-law concerned that the present request for a preliminary ruling can be said to be the inevitable consequence of a situation regarded as ‘exceptional’ which may for now, to state matters simply, be classified as ultra vires: namely a finding that an EU body or authority has seriously breached the limits of the competences derived from the Treaties, the basis and prior conditions for that finding being the national constitution. I shall, for the time being, confine myself to the ultra vires aspect of this case-law, leaving to one side the ‘constitutional identity’ aspect.

43. The present case corresponds precisely to the situation I have just described: the national court starts from a finding of principle that there has been an ultra vires act on the part of an EU body. ( 18 ) More specifically, under national law, it is a question of ‘an obvious and structurally significant ultra vires act’, ( 19 ) with additionally, in this case, consequences for core provisions of the national constitutional order. ( 20 )

44. So far as the function of the present request for a preliminary ruling is concerned, the BVerfG had stated in Honeywell that, in a situation of that kind and in the framework of an ultra vires review to a certain extent already under way, the Court of Justice is to be ‘given the opportunity’ to rule on the validity of the act at issue, a ruling which the BVerfG will regard as ‘in principle … a binding interpretation of EU law’. ( 21 )

45. For the moment we may leave to one side the issue as to whether the referring court’s turn of phrase adequately reflects the duty incumbent on national courts of last instance under Article 267 TFEU. What matters is that proceedings before the Court of Justice concerning the validity of a contested act are in this way ‘inserted’ in a main action whose object has, since the commencement of the action, been an ultra vires review of that act. It is true that this entails recognition of the principle that it is for the Court of Justice to give its interpretation of EU law — which is binding for national courts — in the course of the review of the contested act. The issue is, however, somewhat more problematic.

46. That is because recognition of that principle does not exclude — as the case-law immediately adds (and if I have understood it correctly) — a subsequent review (‘in addition’) by the BVerfG when it is ‘obvious’ that the contested act has infringed the principle of conferral, such an infringement being taken to be ‘obvious’ when it takes place ‘in such a way as specifically infringes’ that principle, and when, in addition, the infringement may be regarded as ‘sufficiently serious’. ( 22 ) If my interpretation of the passage in question is correct, it is clear that the ‘insertion’, so to speak, of the request for a preliminary ruling in the course of a final assessment by a national court of an ultra vires act gives rise to problems which I shall describe as functional.

47. That request, which is considered to be necessary, that the Court of Justice give a preliminary ruling on the contested act, albeit solely from the perspective of EU law, is for its part presented as an expression of the ‘cooperative relationship’ which must obtain between the two courts, a notion that was created by the referring court itself.

48. This ‘cooperative relationship’ is far from being precisely defined but it is clear that it purports to be something more than the imprecise ‘dialogue’ between courts. It is said to derive ultimately from the notion that the obligation of the BVerfG to safeguard the basic order under the national constitution must always be guided by an open and receptive attitude to EU law (‘europarechtsfreundlich’), a notion which it might also have been possible to derive from the principle of sincere cooperation (Article 4(3) TEU).

49. Therein lies all the ambiguity with which the Court of Justice is faced in this reference for a preliminary ruling: there is a national constitutional court which, on the one hand, ultimately accepts its position as a court of last instance for the purposes of Article 267 TFEU, and does so as the expression of a special ‘cooperative relationship’ and a general principle of openness to the so-called ‘integration programme’ but which, on the other hand, wishes, as it makes clear, to bring a matter before the Court of Justice without relinquishing its own ultimate responsibility to state what the law is with regard to the constitutional conditions and limits of European integration so far as its own State is concerned. That ambivalence runs all through the request for a preliminary ruling, so that it is extremely difficult to disregard it entirely when analysing the case.

50. Confining myself to the problem which I am classifying as that of the function of the present request for a preliminary ruling, I think it appropriate to start by examining whether the present request is founded on the basic premisses on which the so-called preliminary ruling procedure before the Court of Justice has been developed in successive Treaties and on which the judicial guarantee of EU law has strategically been built up. ( 23 )

51. If the only way of interpreting the present reference for a preliminary ruling were the one emphatically proposed by the Republic of Italy, ( 24 ) the only possible conclusion would be that, appearances aside, this is not actually an ‘Article 267’ reference for a preliminary ruling but something else — something which in any event is difficult to locate in the Treaty.

52. As some of the interested persons participating in these proceedings have rightly observed, the preliminary ruling procedure was, in fact, never conceived of as a mere ‘opportunity’ for the Court of Justice to ‘concur’ with the national court, either on a finding of ultra vires or on something else, with the possible consequence that any ‘failure to concur’ on the part of the Court of Justice could render its answer nugatory. It is also clear that that view is not invalidated by the fact that there is an attitude which is in principle receptive to an interpretation of the act at issue in conformity with EU law. Finally, in such circumstances, a request to the Court of Justice to give a preliminary ruling could even end by having the undesirable effect of embroiling the Court in the chain of events ultimately leading to the breakdown in the ‘constitutional compact’ underlying European integration. ( 25 )

53. If the present request for a preliminary ruling is understood in that way, the referring court appears to suggest, still within the sphere of the ultra vires review, that its criterion or benchmark for assessing the act in issue could be different from that of the Court of Justice (they might not ‘entirely coincide’). ( 26 ) That would mean that the dispute before the BVerfG would to some extent be different from the previous proceedings before the Court of Justice. However, on the basis of both the caution with which the BVerfG expresses itself and the nature of the arguments that it advances, ( 27 ) I am inclined to think that, in substantive terms, the criterion for ultra vires review would to a large extent be the same.

54. In this respect the present reference may be a good indication that that is so. Whilst the assessment of the validity of the contested decision of the ECB will to a great extent be determined by the interpretation given to the scope of the Bank’s mandate, in particular the primary objective of ‘price stability’, that concept is an integral part of both the Treaty (Article 127(1) TFEU) and the national constitution (Article 88, BL, in fine). In both cases, it would be a question of interpreting the scope of a single concept, that of ‘price stability’ as the overriding objective of the ECB, regardless of whether that concept is to be found in one or other of the basic provisions, or in both of them.

55. According to the order for reference, however, it is not only the principle of conferral (ultra vires) which is in issue in the main proceedings but also the ‘constitutional identity’ of the Federal Republic of Germany; that is so because of the consequences which the contested act is said to entail for the national constitutional body which is first and foremost responsible for expressing the will of the citizens. ‘Ultra vires review’ and ‘identity review’, to use the terms employed by the BVerfG itself, are said to converge in the main proceedings.

56. The question of the different review criteria to be applied by each of the courts arises again in this part of the order for reference. Thus, as regards specifically the ‘identity review’, the BVerfG expressly proposes that ‘in the cooperative relationship which exists, it is for the Court of Justice to interpret the measure. On the other hand, it is for the BVerfG to determine the inviolable core of constitutional identity and to review whether the measure (as interpreted by the Court of Justice) encroaches on that core’. ( 28 )

57. At this point it would once again be appropriate to include a number of considerations of some importance. I shall merely point out, however, without it being necessary to examine other possibilities, that in the present case — in which everything seems to suggest that the ‘ultra vires review’ and the ‘identity review’ are inextricably linked — the difficulties, alluded to above, connected with recognising a difference in review criteria as between the task of the Court of Justice and that of the BVerfG remain relevant.

58. In any event, at this stage of my reflections, I should like to make two observations of a general nature.

59. The first is that it seems to me an all but impossible task to preserve this Union, as we know it today, if it is to be made subject to an absolute reservation, ill-defined and virtually at the discretion of each of the Member States, which takes the form of a category described as ‘constitutional identity’. That is particularly the case if that ‘constitutional identity’ is stated to be different from the ‘national identity’ referred to in Article 4(2) TEU.

60. Such a ‘reservation of identity’, independently formed and interpreted by the competent — often judicial — bodies of the Member States (of which, it need hardly be recalled, there are currently 28) would very probably leave the EU legal order in a subordinate position, at least in qualitative terms. Without going into details, and without seeking to pass judgment, I think that the characteristics of the case before us may provide a good illustration of the scenario I have just outlined.

61. Second, I think it useful to recall that the Court of Justice has long worked with the category of ‘constitutional traditions common’ to the Member States when seeking guidelines on which to construct the system of values on which the Union is based. ( 29 ) Specifically, the Court of Justice has given preference to those constitutional traditions when establishing a particular culture of rights, namely that of the Union. The Union has thus acquired the character, not just of a community governed by the rule of law, but also of a ‘community imbued with a constitutional culture’. ( 30 ) That common constitutional culture can be seen as part of the common identity of the Union, with the important consequence, to my mind, that the constitutional identity of each Member State, which of course is specific to the extent necessary, cannot be regarded, to state matters cautiously, as light years away from that common constitutional culture. Rather, a clearly understood, open, attitude to EU law should in the medium and long term give rise, as a principle, to basic convergence between the constitutional identity of the Union and that of each of the Member States.

62. Returning now to the functional difficulty of the request for a preliminary ruling, I consider that the risk of the latter being ‘manipulated’, in the context of a national assessment in the event of an ‘ultra vires review’ in conjunction with an ‘identity review’, is sufficiently real to ask whether an alternative interpretation would be possible which would allow the difficulty in question to be overcome. In my view, an alternative reading would be possible, having regard to what appears to have been at the origin of this line of case-law, whilst at the same time making use of the possibilities afforded by the principle of sincere cooperation (Article 4(3) TEU). Ultimately, it would involve taking advantage of the virtues of the ambiguity that seems to be inherent in the request for a preliminary ruling, to which I have already alluded.

63. It must be borne in mind that the commitment, so to speak, to refer a question to the Court of Justice for a preliminary ruling appears to have been an innovation introduced in the judgment of the BVerfG of 6 July 2010 (Honeywell) with the intention, as has been widely acknowledged, of keeping open the dialogue between the courts, in such a way that that dialogue may continue as long as the importance of the case requires. ( 31 ) Seen in that light, the fact of providing for a reference for a preliminary ruling to be made could be said to entail a sincere intention that the interpretation that may be given by the Court of Justice of EU law should serve as a sufficient basis for resolving the claims raised in the proceedings before the national court. It is to be hoped that, in the end, any subsequent review on the basis of the constitutional criteria would not, in the circumstances of the case, reach conclusions that were in open contradiction with the answer given by the Court of Justice.

64. Furthermore, it is clear that the principle of sincere cooperation also applies to courts and tribunals, including the two courts concerned in these important proceedings. ( 32 ) That mutual loyalty is all the more important in those cases in which the supreme court of a Member State, responsibly exercising its constitutional jurisdiction, and without going into other considerations, raises, in a spirit of sincere cooperation, its concern about a given decision of an EU body. The principle of sincere cooperation is of course binding on the national court, as it is part of its own responsibility to give that principle form and effect. As far as the Court of Justice is concerned, that principle, in the circumstances of this case, entails a two-fold obligation.

65. In the first place, substantively, that principle requires the Court of Justice to respond in the greatest spirit of cooperation possible to a question which has itself been referred to it in the same spirit; there cannot be the least doubt about that. In particular, if the national court, in explaining the extent to which the act in question causes it to have serious doubts as to validity or interpretation, has been particularly plain-spoken, that will have to be interpreted as an expression of its level of concern in that regard. I understand that that is the sense of the German Government’s appeal for ‘constructive’ treatment of the present case. ( 33 )

66. In the second place, and this is above all what is in issue now, the principle of sincere cooperation requires a particular effort on the part of the Court of Justice to provide an answer on the substance to the questions referred, notwithstanding all the difficulties to which ample reference has been made here. That would require the Court of Justice to proceed on the basis of a particular assumption regarding the ultimate fate of its answer.

67. In concrete terms, that means that the Court of Justice, rather than immediately excluding such a possibility, would in fact trust the national court — once it has considered the answer provided by the Court of Justice to the question raised and without prejudice to the exercise of its own duties — to accept that answer as decisive in the proceedings before it. Sincere cooperation involves an element of trust and that trust may take on a particular meaning in this case. It must be borne in mind that the present request for a preliminary ruling appears to have been cast by the BVerfG in terms which permit the Court of Justice to expect, within the limits of what is reasonable, that the BVerfG will accept as sufficient and final the answer it receives and as providing it with sufficient criteria to enable it to decide on the claims raised in the main proceedings. ( 34 ) The ‘road map’ which the BVerfG itself outlined in Honeywell could support this approach. ( 35 )

68. In so far as that analysis of the situation is acceptable, I take the view that the Court of Justice should, in approaching the functional problem to which this request for a preliminary ruling gives rise, disregard possibilities other than the one I have just outlined, inasmuch as they can only be regarded as extreme cases, scarcely conceivable, and, ultimately, an insufficient basis for refusing to give an answer on the substance in response to the questions raised in the present request for a preliminary ruling.

69. Accordingly, as an intermediate conclusion, I propose that the Court of Justice should declare that this request for a preliminary ruling may be answered on the substance.

V – Admissibility

70. A number of Member States, as well as the institutions which have submitted observations in the present case, have raised the issue of admissibility in relation to the BVerfG’s principal questions, maintaining that they concern a question of validity that affects an act, the OMT programme, which does not have legal effects vis-à-vis third parties.

71. Stated very briefly, those interested parties emphasise the non-final, even ‘preparatory’, nature of the act of 6 September 2012, by which the Governing Council decided to adopt the essential criteria that would govern the OMT programme and whose final adoption is still pending. As the ECB has confirmed, certain criteria were decided upon at that meeting but not the OMT programme as such. It will be possible to review the validity of that programme only when the Governing Council formally adopts the programme and publishes it, in accordance with the rules pertaining to legal acts laid down in the Statute of the ESCB and of the ECB.

72. It is argued that the case-law of the Court of Justice lends support in principle to that interpretation. The case-law concerning actions for annulment precludes challenges to acts which have no legal effects. ( 36 ) In the precise context of references for preliminary rulings, the Court of Justice has in the past declared inadmissible references entailing a review of the validity of an ‘atypical’ act, which has not been published and which does not have binding effects. ( 37 ) Various parties participating in these proceedings submit that that is the case of the OMT programme, which was announced by the President of the ECB at the press conference on 6 September 2012 and whose principal technical features were subsequently described in a press release.

73. For the reasons which I shall set out below, it none the less seems to me that the OMT programme is an act whose validity may be examined in preliminary ruling proceedings. There are two separate reasons for that conclusion. In the first place, I believe that it is decisive that the act in question is one which sets out the broad features of a general programme for action by an EU institution. In the second place, it seems to me necessary to take into account the particular importance which public communication has assumed for the ECB in the implementation of monetary policy today.

74. From the very beginning the Court of Justice has required that, for an act to be actionable, two conditions must be met: the act must be binding and must be capable of producing legal effects. ( 38 ) Those conditions are cumulative, although sometimes, for example when the validity of recommendations is reviewed in preliminary ruling proceedings, they are presented as alternatives. ( 39 )

75. I consider, however, that those two conditions are assessed differently depending on who is the direct addressee of the contested act. As I shall now explain, the case-law has, in the application of those conditions, adopted a more flexible approach where the impugned act is a measure outlining a general programme of action, intended to bind the actual authority which is the author of the decision, than where the act contains a measure which creates rights and obligations with regard to third parties. The reason for that is that general action programmes of public authorities may take atypical forms and yet still be capable of having a very direct impact on the legal situation of individuals. On the other hand, measures whose direct addressees are individuals must meet particular conditions as to substance and form if they are not to be treated as non-existent.

76. A general programme of action, such as that at issue here, may be presented using atypical techniques, it may be addressed to the authority which is itself the author of the act, it may be in formal terms non-existent so far as concerns the world outside the authority, but the fact that it is capable of having a decisive impact on the legal situation of third parties justifies taking a non-formalistic approach when considering whether it should be treated as an ‘act’. Otherwise, there would be a risk that an institution could undermine the system of acts and the corresponding judicial safeguards by disguising acts that are intended to produce external effects as general programmes.

77. The case-law of the Court of Justice has been particularly flexible when dealing with general action programmes of this kind which are capable of producing external effects.

78. The judgment in Commission v Council (‘ERTA’), ( 40 ) given in 1971, is an important starting point since it considers, inter alia, the status of the proceedings of the Council relating to the negotiation and conclusion by the Member States of an international agreement. In the Council’s view, those proceedings did not constitute, either by their form or by their subject-matter or content, an act open to legal challenge but were nothing more than a coordination of policies amongst Member States within the framework of the Council, without any intention to create rights, impose obligations or alter any legal position.

79. When it analysed the Council’s arguments the Court of Justice stated that judicial review must be available in the case of ‘all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects’. ( 41 ) Having examined the decision in issue, the Court of Justice principally drew attention to two characteristics: first, it was not simply the expression of a voluntary coordination, but reflected a course of action that was binding; ( 42 ) and, second, the provisions adopted in that decision were capable of ‘derogating … from the procedure laid down by the Treaty’. ( 43 )

80. Similarly, and as a supplement to its ruling on the substance in the ERTA judgment (EU:C:1971:32), the Court of Justice took particular account of the circumstances in which the contested act was adopted. In addition to the objective aspect referred to above, the context in which an act is adopted may provide further indications which confirm either the author’s intention that the act should produce effects vis-à-vis third parties or the fact that the author was aware of the potential external impact of the measure. The significance of the surrounding circumstances was highlighted by the Court of Justice in France v Commission, ( 44 ) in which it was accepted that an action could be brought in respect of an internal Commission instruction because it was distinguished from an ordinary service instruction ‘both by the circumstances in which it was adopted and by the conditions under which it was prepared, drawn up and published’. ( 45 )

81. Against the background of that case-law, I shall now go on to consider whether the act whose validity is questioned by the referring court is open to legal challenge.

82. At least in terms of its formal presentation, the OMT programme is a measure with atypical features. It was drawn up in the Governing Council of the ECB on 5 and 6 September 2012 and was recorded in the minutes of that meeting, which indicated that a description of its technical features would subsequently be given in a press release. Thus, details of the programme’s technical features were given at a press conference held by the President of the ECB and a press release was subsequently published in English on the ECB’s website. The publication and disclosure of the programme on the internet is the only ‘official’ written text available about the OMT programme if one discounts the draft Decision and Guideline, which the ECB has produced to the Court in these proceedings but which are still internal Bank documents awaiting final adoption and subsequent publication in the Official Journal. Those drafts describe in detail what had been spelled out in general terms, albeit with considerable precision, in the press release.

83. There is no doubt that the OMT programme is a decision with specific content, which was the subject of discussion over two days, and that the principal features of the programme were adopted within the Governing Council. Furthermore, the fact that the basic features of the programme were made public, both at the press conference and in written form on the ECB’s website, confirms the obvious willingness of the ECB to make public what had previously been decided upon within the Governing Council. The measure in question is a general programme of action since it lays down the conditions on which the ECB will act in a situation in which the monetary policy transmission channels have become blocked but it is also a measure which aims to have an immediate external effect. Otherwise, it would not have been announced with the widest publicity possible at a press conference and its technical features would not have been published on the ECB’s website.

84. Moreover, the circumstances surrounding the OMT programme appear to confirm that the ECB’s objective was to ‘intervene’ in the markets, perhaps in an unconventional way, solely by making an announcement about the programme. The speech given by the President of the ECB on 26 July 2012 in London, referred to above, which stated that all the necessary measures would be taken to ‘save the common currency’, the press conference on 2 August 2012 following the meeting of the Governing Council of the same day and the situation affecting the government bond markets of various Member States at that time all confirm that the ECB’s intention in making an announcement about the OMT programme was not just to give an account of internal work on an initiative that was still at the discussion stage but also to produce an effect by making an announcement about the creation of a potentially ambitious programme intended, so it is claimed, to put an end to some of the difficulties that the monetary policy transmission mechanism was experiencing at that time. The proof of that is the significant impact which there is every indication that that announcement of the programme had on the financial markets, an impact which, according to the ECB and the Commission, is still being felt more than two years later.

85. It is also important to point out that the OMT programme entailed not the publication of a simple individual act but rather the announcement of a full normative programme, for the future, which included relatively precise conditions and whose purpose was regulatory. In view of the content of the programme, it may be added that on 6 September 2012 the ECB was not making an announcement about some decision of little consequence. On the contrary, details were published on that day of a measure which was clearly of great significance for the euro area and which was intended, although it was not yet complete, to last over time.

86. At this point it is appropriate to refer to the second of the circumstances which seem to me relevant for the purpose of rejecting the objections to admissibility. Account must be taken of the fact that the present case concerns an act of public communication on the part of a central bank, under which approval is given to a monetary-policy programme. Central bank communications are not comparable to those of other institutions, whether they be political or technical. Over the last 30 years, central banks have undergone significant developments that have affected their instruments of monetary policy, which the experts all agree now include public communication.

87. It is a fact that the communications strategy of central banks has become one of the central pillars of contemporary monetary policy. Given the impossibility of predicting rational behaviour on the markets, an effective way of managing expectations and, therefore, of ensuring the effectiveness of monetary policy is to exploit all the possibilities of public communication (communications strategies) open to central banks. ( 46 ) Taking account not only of the reputation of central banks and the information available to them but also of the powers afforded them by conventional monetary policy instruments, announcements, opinions or statements by the representatives of central banks generally play a crucial role in the development of monetary policy today. ( 47 )

88. There is no doubt that the ECB now also includes communication among its key monetary policy tools. The ECB has in the past acknowledged that itself and nobody would deny that the regular communication to the public by the ECB of the broad lines of its policy, or of particular opinions which may indicate future courses of action on its part, represents a central pillar of its activities. ( 48 ) To my mind, this element, which is very particular to the ECB and characteristic of it, plays a highly significant role in defining the nature of an act like the announcement of the OMT programme on 6 September 2012.

89. Finally, and in view of the great importance of the ECB’s communication strategy, it is appropriate to bear in mind that the alternative — namely declaring an act such as the OMT programme not to be actionable — would entail the risk of excluding a significant number of decisions of the ECB from all judicial review merely on the ground that they have not been formally adopted and published in the Official Journal. If a measure does not need to be published officially in its standard form in order to produce effects — because it is enough to publicise it at a press conference or through a press release for it to have an impact outside the institution –, the system of acts and judicial review provided for in the Treaties could be seriously undermined if it were not possible to review the legality of that measure.

90. Accordingly, I take the view that, in the specific case of actions of this kind by the ECB, in which acts of public communication assume special significance for the effectiveness of monetary policy, an act such as the one called in question by the BVerfG, as it was announced on 6 September 2012, constitutes — having regard not only to its content and the actual effects that it may produce but also to the circumstances in which the measure was adopted — an act of an institution whose validity may be called in question in the framework of proceedings for a preliminary ruling under Article 267 TFEU.

91. I therefore consider that the objections to admissibility raised against the questions referred for a preliminary ruling on validity must be rejected. It will therefore not be necessary to rule on the question on interpretation which the referring court has put forward in the alternative.

VI – The questions referred for a preliminary ruling

A – The first question referred: Articles 119 TFEU and 127(1) and (2) TFEU and the limits of the ECB’s monetary policy

92. By its first question, the BVerfG airs its doubts about the validity of the OMT programme announced by the ECB on 6 September 2012, specifically asking the Court of Justice whether it is a measure that is incompatible with Articles 119 TFEU and 127(1) and (2) TFEU and whether it encroaches upon the competence of the Member States.

93. In its order for reference, the BVerfG, after extensive and detailed reasoning, concludes that there are sufficient grounds to support the view that the ECB has adopted an economic policy measure rather than a monetary policy measure. The BVerfG also finds there to be an ultra vires act in breach of the principle of conferral, which must determine the ECB’s conduct. The BVerfG points to four aspects of the OMT programme which, in its view, confirm the aforementioned ultra vires act: conditionality, selectivity, parallelism and circumvention. The concerns of the referring court highlight, in more general terms, the question of the limits to which the powers of the ECB are subject in exceptional circumstances such as those of the summer of 2012.

1. Position of the interested parties

94. All the applicants in the main proceedings in essence concur that the Treaties should be interpreted as meaning that a programme such as that announced by the ECB on 6 September 2012 constitutes a measure of economic policy. In their opinion, the OMT programme disregards the mandate which primarily constrains the ECB to the objective of maintaining price stability, since it is a measure that has a direct impact on the financing sources of the Member States concerned, which places it in the area of economic policy. In their submissions, they refer repeatedly to the judgment in Pringle, ( 49 ) in which the Court stated that the creation of the ESM was an economic policy measure and refused to classify it as a monetary policy. The applicants in the main proceedings submit that, in view of the features common to the ESM and a programme such as OMT, the latter must also be classified as an economic policy measure.

95. Both Mr Gauweiler and Mr Huber place particular emphasis on the fact that the true objective of the OMT programme is, in their view, not to re-establish the monetary policy transmission channels but rather to ‘save the euro’ by means of the ‘communitisation’ or pooling of the debt of certain Member States, which in their submission is incompatible with the Treaties since it puts some Member States at risk of assuming the debts of other Member States. They submit that such a measure clearly goes beyond the ‘support’ for the economic policies of the Union and the Member States which the ECB may give under the Treaties.

96. Mr von Stein rejects the proposition that interest rates on sovereign debt markets were at artificial levels in the months preceding the announcement about the OMT programme. He submits that those interest rates merely reflected a genuine market price, in respect of which the ECB intervened, manipulating that price artificially, by announcing its willingness to buy the bonds of certain Member States. He argues that distorting the market in that way is not consistent with the mandate which the Treaties confer on the ECB, which is to maintain price stability.

97. Mr Bandulet emphasises that the OMT programme cannot make up for the structural shortcomings in the design of monetary union. He argues that that is not at all a competence that has been conferred on the ECB since, if it were otherwise, the democratic principle and the principle of the sovereignty of the people would be infringed.

98. The parliamentary group Die Linke also disputes that the ECB is competent to adopt the OMT programme, although it deploys different arguments. Die Linke emphasises the economic consequences which have followed from the successive financial assistance programmes in various Member States. The group maintains that those effects confirm that the ECB, in supporting those rescue packages through the implementation of the OMT programme, is involving itself in the economic policy of the Member States. Die Linke also invokes various provisions of the Charter of Fundamental Rights of the European Union in order to challenge the intervention of the Union and the ECB in the States that are subject to financial assistance programmes.

99. All the States that have participated in these proceedings, together with the ECB and the Commission (‘the States and the institutions’), submit, in variously nuanced ways, that the OMT programme, as it was made known through the press release, is a monetary policy measure that is compatible with the competences conferred on the ECB by the Treaties.

100. The States and the institutions are also agreed on the fact that the ECB enjoys a broad discretion in the definition and implementation of monetary policy. The Court of Justice should acknowledge that broad discretion and recognise the objectives which the ECB set forth when announcing its OMT programme. The States and the institutions accept that, in the framework of those objectives, the ECB may adopt unconventional monetary policy measures, provided that that is strictly necessary to achieve the objectives set. Specifically, both the Republic of Poland and the Kingdom of Spain submit that the OMT programme is consistent with the various aspects of the principle of proportionality.

101. The States and the institutions also all deny, contrary to the view expressed by the referring court, that it follows from the judgment in Pringle (EU:C:2012:756) that the OMT programme is an economic policy measure. In their view, Pringle recognises that economic policy and monetary policy are closely linked, with the result that an economic policy measure may have an impact on monetary policy and vice versa, without that altering the nature of the measure. In the present case, the fact that the OMT programme may have an impact on economic policy does not, in itself, convert that programme into an economic policy measure.

102. As regards the fact that the OMT programme may bring about artificial changes in prices on the government bond market, the Government of the Republic of Poland, the Commission and the ECB submit that all monetary policy has the aim of altering prices since it is an inherent function of monetary policy to have an effect on the markets by means of measures that modify certain patterns of behaviour, although always with the objective of fulfilling the mandate conferred on the Bank, in this case the maintenance of price stability.

103. The Federal Republic of Germany defends in principle the position that the OMT programme in the terms in which it is known is lawful. It has, however, stressed that currently all that exists is an announcement giving notice of that programme and that it will be necessary to wait until the programme is actually implemented in order to determine whether it is in fact a measure of economic policy or monetary policy. In any event, the Federal Republic of Germany submits that the ECB enjoys a broad discretion and that a measure would transgress the boundaries set by the Treaties only if it was obviously an economic policy measure. It also suggests that it would be helpful if the Court of Justice were to provide criteria that would permit the OMT programme to be implemented in a way compatible with the Treaties and, so far as possible, with the fundamental constitutional structures of the Federal Republic of Germany.

104. The ECB defends the legality of the OMT programme by referring to the events that occurred in the summer of 2012. At that time fears that the euro was reversible were spreading among investors, bringing about a marked spike in the interest rates paid in respect of the government bonds of various Member States. In that situation the ECB argues that it had lost its ability to implement monetary policy through the usual channels for monetary policy transmission. The resulting fragmentation of the sovereign debt markets, together with the financing difficulties experienced by various Member States (and also, by extension, the financial institutions of those States), was preventing the proper transmission of the ‘impulses’ or signals which the ECB normally sends out. In the ECB’s submission, those circumstances were grounds for adopting an unconventional monetary policy measure, such as the OMT programme. In short, the aim of the programme, according to the ECB, is not to facilitate the financing conditions of certain Member States, or to determine their economic policies, but rather to ‘unblock’ the ECB’s monetary policy transmission channels.

105. The ECB denies that the technical features of the OMT programme mask an economic policy measure. The programme’s ‘conditionality’ is, in the Bank’s view, essential in order to prevent implementation of the programme providing an incentive to the States concerned to cease carrying out the structural reforms necessary to improve their economic fundamentals. Similarly, the ECB argues that the ‘selectivity’ of the measures is inherent in the OMT programme since the disruption of the monetary policy transmission channels arose as a result of increases in the interest rates for the government bonds of certain Member States. In short, the ECB submits that the OMT programme contains safeguards that ensure it is linked to monetary policy and remains within the scope of the powers which the Treaties confer on the Bank.

2. Analysis

a) Preliminary observations

106. Before embarking on the analysis specific to the question raised by the BVerfG, it is appropriate to pause to consider two decisive aspects of the present case: (i) the status and mandate of the ECB, as defined in the Treaties, and (ii) the concept of ‘unconventional monetary policy measures’. Those two areas will provide us with the basic elements for assessing the legality of a programme such like OMT, which, according to the ECB, is among those unconventional monetary policy measures.

i) The status and mandate of the ECB

107. The ECB is the institution on which the Treaties confer responsibility for the exercise of the Union’s exclusive competence in respect of monetary policy. The ECB and the national central banks constitute the ESCB, whose principal task, notwithstanding any measures that may be taken in ‘support of economic policy’, is to ensure ‘price stability’. ( 50 ) Therefore, unlike other central banks, the ECB is characterised by the fact that it is constrained to a clear mandate that is closely linked to anti-inflationary goals. Both the travaux préparatoires relating to the Treaty of Maastricht ( 51 ) and studies of the history of monetary policy ( 52 ) confirm the importance of that mandate in the negotiations that culminated in the creation of the ECB.

108. Besides the fact that it must strictly adhere to the objective of ensuring price stability, a further characteristic of the ECB is that it has a high degree of functional as well as organic independence. ( 53 ) The Treaties stress on numerous occasions the independent nature of all the actions undertaken by the ECB, which should be considered in conjunction with the fact that the Statute of the ESCB and of the ECB is very difficult to amend, something which differentiates the Bank from the central banks around it, whose regulatory framework may be amended by the relevant national Parliaments. ( 54 ) That is not the case of the ECB, since any amendment of its Statute requires amendment of the Treaties. ( 55 )

109. Just as is the case with national central banks, the ECB’s independence is also intended to ensure that it is kept away from the political debate, there being an absolute prohibition on any instructions from other institutions or from the Member States. ( 56 ) Moreover, that detachment from political activity is necessary because of the extremely technical nature and high degree of specialisation characteristic of monetary policy. ( 57 )

110. In fact, the Treaties confer on the ECB sole responsibility for framing and implementing monetary policy, for which purpose it is given substantial resources with which to undertake its functions. On account of those resources the ECB also has access to knowledge and particularly valuable information, which permits it to perform its tasks more effectively whilst also, over time, bolstering its technical expertise and reputation. Those features are essential for ensuring that monetary policy signals actually reach the economy since, as has previously been stated, one of the functions of central banks today is the management of expectations, and technical expertise, reputation and public communication are basic tools for carrying out that function.

111. The ECB must accordingly be afforded a broad discretion for the purpose of framing and implementing the Union’s monetary policy. ( 58 ) The Courts, when reviewing the ECB’s activity, must therefore avoid the risk of supplanting the Bank, by venturing into a highly technical terrain in which it is necessary to have an expertise and experience which, according to the Treaties, devolves solely upon the ECB. Therefore, the intensity of judicial review of the ECB’s activity, its mandatory nature aside, must be characterised by a considerable degree of caution. ( 59 )

112. Finally, it is important to point out that the ECB’s monetary policy is implemented, as has been noted, through various ‘transmission channels or mechanisms’, by means of which the Bank intervenes in the market and fulfils its mandate of ensuring price stability. ( 60 ) In order to carry out its monetary policy, the ECB controls the monetary base of the euro area economy, which it does by transmitting the appropriate ‘impulses’ or signals, chiefly through the setting of interest rates, which will subsequently pass from the financial sector to firms and households. ( 61 )

113. In this respect, to ensure the proper functioning of these transmission channels, the Statute of the ESCB and of the ECB confers on the ESCB an express competence to adopt a set of ‘monetary functions and operations’. Of those operations, the ones provided for in Article 18(1) of the Statute are particularly relevant for the purposes of this case: Article 18(1) permits the ECB and the national central banks to ‘operate in the financial markets by buying and selling outright (spot and forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments, whether in euro or other currencies, as well as precious metals’.

114. However, as will be seen, a programme like OMT cannot be said to be among the ECB’s ordinary monetary policy instruments. The OMT programme formally deploys one of the monetary operations mentioned above, but does so in a sufficiently unusual manner to warrant classification as an ‘unconventional monetary policy measure’. I shall explain below to what that concept more specifically refers, how it has been justified by the ECB and the extent to which it is a means duly provided for in the Treaties.

ii) Unconventional monetary policy measures and classification of the OMT programme as such

– The ECB’s view of unconventional monetary policy measures

115. The ECB defends the lawfulness of the OMT programme on the basis that it is a measure intended to ‘unblock’ the Union’s monetary policy transmission channels. As has been explained above, those monetary policy transmission channels do not function as mechanisms producing immediate effect but as a framework through which the ECB sends out a series of ‘impulses’ or signals with a view to them reaching the real economy. According to the ECB, monetary policy may be affected by factors external to the transmission channels, factors which are liable to disrupt the proper functioning of the signals sent out by the ECB: an international political or economic crisis, or a significant change in oil prices, amongst other factors, may severely interfere with the ‘impulses’ that the ECB sends out via the monetary policy transmission channels.

116. When a situation of that kind occurs, the ECB considers it has competence to intervene using its own instruments with the aim of ‘unblocking’ those channels. In such a case the actions it takes are different from those which are part of the ECB’s normal practice, since they can be said not to involve so much a ‘standard’ operation but rather an operation to ‘unblock’ and subsequently restore monetary policy instruments properly so-called. ( 62 )

117. Both the ECB and the Member States that have participated in these proceedings maintain that it is legitimate to have recourse to unconventional measures of this kind as part of monetary policy. In fact, according to the documents before the Court, intervention of this sort has been used by the majority of central banks throughout the international financial crisis that began in 2008, ( 63 ) including, as is apparent from the present proceedings, by the ECB itself. ( 64 ) In the view of the ECB and those Member States, the Treaties do not prevent the ECB from exercising its powers to restore its monetary policy instruments when circumstances arise which significantly disrupt the normal functioning of the transmission channels. In the Commission’s submission, action of that kind is compatible with the Treaties, provided that it is carried out prudently and is subject to safeguards.

118. On the basis of the foregoing considerations, it is appropriate to consider the precise nature of the OMT programme, as it was announced in the press release of 6 September 2012.

– The OMT programme as an unconventional monetary policy measure

119. The OMT programme belongs, formally, among the operations provided for in Article 18.1 of the Statute of the ESCB and of the ECB. It is clear that, in conferring power on the ESCB to buy claims and marketable instruments, that provision seeks, first and foremost, to ensure that tools are available to the ECB for controlling the monetary base, as a conventional means of maintaining price stability.

120. It should, however, immediately be added that the OMT programme uses the powers set out in Article 18.1 of the Statute in a way which is at some remove from the ECB’s standard practice in carrying out its operations. It is clear that a selective measure, which is directed at one or more States of the euro area and which entails purchasing their bonds, without any previous quantitative limit being set, in the expectation that market financing conditions will improve, is at some remove from the ECB’s standard practice.

121. As is stated in the press release of 6 September 2012, the OMT programme provides for intervention by the ECB on the secondary government bond market, enabling the Bank to purchase government bonds of euro area States that are subject to a financial assistance programme and that are presumably experiencing difficulties in raising loans. The premiss on which the OMT programme is based is the occurrence of an exogenous shock that disrupts the monetary policy transmission channels. That disruptive factor comprises, so the ECB reasons, a relatively sudden and virtually unbearable increase in the risk premia of certain euro area States, an increase which in principle does not reflect the macroeconomic reality of those States and which, as a result, prevents the ECB from transmitting its signals effectively and, therefore, from fulfilling its price stability mandate.

122. In view of the foregoing, I therefore consider that the OMT programme may be classified as an unconventional monetary policy measure, with the consequences that that will entail for the purposes of reviewing the measure.

b) The ECB’s competences and the OMT programme

123. Having made the foregoing observations, I shall focus on two matters to which consideration must be given if the first question raised by the BVerfG is to be answered comprehensively.

124. In the first place it is necessary to consider whether a programme such as OMT may be classified as a monetary policy measure or is, instead, an economic policy measure and, therefore, prohibited so far as the ECB is concerned. In undertaking that assessment, the technical features pointed out by the BVerfG will each be individually considered. Thereafter, if it is possible to classify the OMT programme as a monetary policy measure, as I shall propose, it will be necessary to examine the programme in the light of the principle of proportionality within the meaning of Article 5(4) TEU.

i) The OMT programme and the economic policies of the Union and the Member States as a limit on the ECB’s competences

– The Union’s economic and monetary policies

125. As I have indicated, the BVerfG is asking whether the ECB, in approving the OMT programme, adopted an economic rather than a monetary policy measure, thereby encroaching upon the competence which Article 119(1) TFEU confers on the Council and the Member States.

126. If we consider primary EU law, Article 119(1) TFEU gives a brief description of the main components of the economic policy of the Union, stating that it is to be based ‘on the close coordination of Member States’ economic policies, on the internal market and on the definition of common objectives, and conducted in accordance with the principle of an open market economy with free competition’. Although the provision is general and thus ambiguous, it none the less provides the basic, defining, elements of those aspects of economic policy which fall within the Union’s competence.

127. The Treaties are silent, however, when it comes to defining the exclusive competence of the Union in relation to monetary policy. The Court of Justice established that in its judgment in Pringle when it found itself obliged to use, as the sole point of reference, the monetary policy objectives laid down by the FEU Treaty. ( 65 ) The primary objective of EU monetary policy, price stability, and support for the general economic policies in the Union, form the principal criterion for defining monetary policy (Articles 127(1) TFEU and 282(2) TFEU). The Court of Justice confirmed that this was so in Pringle, in which the objectives ascribed to that policy were the sole criterion it used when determining whether or not an amendment of the Treaty fell within the sphere of monetary policy.

128. Despite the fact that, on the face of it, the Treaties provide only limited criteria, EU law has a number of useful interpretative tools at its disposal for the purpose of determining whether a decision falls within the sphere of the Union’s economic policy or its monetary policy.

129. Although it may appear self-evident, it is important to make the point that monetary policy forms part of general economic policy. The division that EU law makes between those policies is a requirement imposed by the structure of the Treaties and by the horizontal and vertical distribution of powers within the Union, but in economic terms it may be stated that any monetary policy measure is ultimately encompassed by the broader category of general economic policy. That connection between the two policies was highlighted by the Court of Justice itself, and by Advocate General Kokott in her View, in Pringle, when it was stated that an economic policy measure cannot be treated as equivalent to a monetary policy measure for the sole reason that it may have indirect effects on the euro. ( 66 ) That reasoning is entirely valid if turned around, as has been pointed out by the ECB, the Commission and the majority of the Member States that have participated in these proceedings, since a monetary policy measure does not become an economic policy measure merely because it may have indirect effects on the economic policy of the Union and the Member States.

130. The fact that the Treaty refrains from providing a precise definition of the monetary policy of the Union is consistent with a functional view of the role of monetary policy, according to which every measure that is given effect through monetary policy instruments constitutes monetary policy. Therefore, if a measure belongs to the category of instruments which the law provides for carrying out monetary policy, there is an initial presumption that such a measure is the result of the Union’s monetary policy being carried out. That is clearly a presumption that could be rebutted if, for example, the measure were to pursue objectives other than those specifically listed in Articles 127(1) TFEU and 282(2) TFEU.

131. Similarly, other provisions of the Treaty that relate to monetary policy provide relevant indications which serve to define that policy more fully. Thus, Articles 123 TFEU and 125 TFEU, which I shall consider more closely when addressing the second question referred for a preliminary ruling, lay down strict prohibitions of the financing of States, whether by means of monetary financing measures or by means of transfers between Member States. Those prohibitions confirm that monetary union, although it is an integral part of a Union founded on the value of solidarity (Article 2 TEU), ( 67 ) also seeks to maintain financial stability, for which purpose it is based on a principle of fiscal discipline and the principle that there is no shared financial liability (the ‘no-bailout’ rule). ( 68 )

132. Therefore, in order for a measure of the ECB actually to form part of monetary policy, it must specifically serve the primary objective of maintaining price stability and it must also take the form of one of the monetary policy instruments expressly provided for in the Treaties and not be contrary to the requirement for fiscal discipline and the principle that there is no shared financial liability. If there are isolated economic-policy aspects to the measure at issue, the latter will be compatible with the ECB’s mandate only as long as it serves to ‘support’ economic policy measures and is subordinate to the ECB’s overriding objective.

– The OMT programme in the light of the criteria for defining the Union’s economic and monetary policies

133. Focusing now on the criteria which have been discussed above, it is appropriate to consider whether the OMT programme is, in nature, a monetary policy measure or an economic policy measure. The referring court has drawn attention to a number of matters that could show that the measure in question is one of economic policy and I shall focus individually on each of them. However, as a preliminary point, it is important to consider the objectives which the ECB has advanced to justify the OMT programme and which have been called in question by the BVerfG and rejected by the applicants in the main proceedings. After considering those grounds and how they should be classified legally, I shall examine the matters singled out by the referring court: conditionality, parallelism, selectivity and circumvention.

– The objectives of the OMT programme

134. As the ECB has explained in detail in its written observations, in the summer of 2012 a number of exceptional circumstances converged in the euro area economy: excessive risk premia applied to various Member States, high volatility in government bond markets, fra