On 7 February 2014 in the OMT Case, the German Constitutional Court in Karlsruhe referred a question about the interpretation of Treaty law to the European Court of Justice for the first time. The question was whether the European Central Bank exceeded its mandate when it declared, in September 2012, that it was prepared to make emergency, unlimited purchases of specific states' bonds. Some view the referral as a genuflection acknowledging the judicial superiority of European Union jurisprudence. Has the Karlsruhe Court relinquished its role as “the final arbiter” and thereby surreptitiously bid farewell to the German sovereignty that the same Senate of the Constitutional Court so vigorously endorsed in the Lisbon Treaty Case in 2009?

One of the most famous scenes from the 1957 James Dean movie classic “Rebel Without a Cause” is the chicken run scene. Two cars are speeding towards an abyss; the one who slows down or jumps out of the car first loses. The chicken run in the movie ends in tragedy; when one of the protagonists finally tries to get out of his car, it is too late—he is caught in the car and dies.

The European Central Bank's (ECB) program of purchasing government bonds, the OMT program (Outright Monetary Transactions Program), which was announced on 6 September 2012, is illegal. With this program, the ECB transgresses its powers. This is the central message of the Federal Constitutional Court's decision from 14 January 2014. However, the decision is not final. The Federal Constitutional Court has suspended the trial and has referred the matter to the European Court of Justice (ECJ) for a preliminary ruling. Only after the ECJ has examined the compatibility of the OMT program with European law will the Federal Constitutional Court pronounce its final judgment.

On 26 July 2012, the European Central Bank (ECB) issued a new currency, the “Draghi.” A country where the Draghi has the status of legal tender must be fabulously wealthy—a single coin gives unlimited purchasing power to its owner. This is one way to characterize ECB President Mario Draghi's pledge to do “whatever it takes” to save the Euro. It is widely believed that the move prevented the common currency from breaking apart. Yet, the ECB's resolve caused severe conflict within the European System of Central Banks (ESCB). A few weeks later, when the Governing Council of the ECB formally adopted the Outright Monetary Transactions (OMT) program to pave the way for the implementation of Draghi's rescue policy, the representative of the German Bundesbank was outvoted. Subsequently—in a maneuver quite unusual among central bankers—he appealed to the public to stir up support for his opposition to the policy.

When the Federal Constitutional Court (hereinafter FCC) decided to refer the question of whether the European Central Bank's (ECB) decision on the purchase of Outright Monetary Transactions (OMTs) is compatible with EU primary law, it effectively forced the Court of Justice of the European Union (CJEU) into a game of “chicken.”

In the environment of ongoing endeavors to “rescue” the Euro, the Second Senate of the Federal Constitutional Court (FCC) is meanwhile dealing with several constitutional complaints challenging matters that could be described as “the future of the German Bundesbank” and “the present and the past of the German Federal Government and the German Bundestag.” Or, to be more specific, the complainants currently challenge the prospective participation of the German Bundesbank in possible future implementations of the so called “OMT Framework” of 6 September 2012. They also argue that the German Federal Government and the German Bundestag “failed to act” regarding this OMT framework.

The boundaries of European integration and especially the relationship between European and German Constitutional Law have occupied the German Constitutional Court—the Bundesverfassungsgericht in Karlsruhe—time and again since its first Solange I Judgment of 1974. Practically all of these decisions—Solange II, Maastricht, Lisbon, and Honeywell to name just a few—have had a major impact not only on the national, but also on the European discourse regarding the future of the European Union. 14 January 2014 now marks the date of another “historic” decision in this sense, which, unsurprisingly, has already led to major discussions not only in Germany, but all over Europe. For the first time ever the Constitutional Court has initiated a referral to the European Court of Justice asking questions about the conformity of some of the highly disputed measures of the ECB taken to fight the crisis with Primary European Law. The reluctance of the Constitutional Court to comply with its duties under the TFEU and to accept the role of the ECJ as the final interpreter of European Law had been criticized for many years, not only after the Lisbon Decision of 2009. However, the Constitutional Court reacted to these critics in its Honeywell Decision of 2010 and, so it seemed, started to redefine its understanding of its relationship with the European judicial system. This redefining process has now found its temporary endpoint with this first referral, which therefore truly stands for a new era in the relationship between the Constitutional Court and the ECJ within the “European Network of Constitutional Courts.”

In Karlsruhe's recent request for a preliminary ruling, an unconventional monetary policy measure of the European Central Bank (ECB) finds an unconventional judicial response. Based on its mandate to enforce the fundamental right to vote, the Federal Constitutional Court (FCC) leaves no doubt about its view that the ECB's Outright Monetary Transactions Programme (OMT Programme) violates the law of the European Union and hence the German Basic Law, unless one reads them in a rather restrictive way. But as unconventional monetary policy steps up the need for the ECB to justify the legality of its measures, so does the FCC's unconventional expansion of the scope of judicial review raise questions which the recent decision in its—generally laudable—brevity leaves underexplored. In particular, the decision does not dwell much on the issue whether it is appropriate for a court to review issues of monetary policy, and which standard of review should apply. Only Judge Gerhardt calls the majority's standard of review into question when he doubts whether the requirement for transgressions of the European Union's competences to be “manifest” is a workable criterion for defining the scope of the FCC's ultra vires control.

The Eurozone banking and sovereign debt crisis has brought the fragility of the European monetary union into sharp focus and exposed the lack of effective instruments at the European level to maintain financial stability. As a response to the crisis, the Member States and the institutions of the Union adopted in short succession several financial assistance measures that have given rise to much political and legal controversy. The European Central Bank (ECB) played an active role in the institutions' efforts to contain the crisis and prevent the disintegration of the Eurozone by deploying a number of so-called non-standard or unconventional monetary policy measures, namely its Securities Markets Programme, Long-Term Refinancing Operations, and in September 2012 the Outright Monetary Transactions Programme (OMT Programme). The OMT Decision envisages unlimited purchases by the ECB of specific types of sovereign bonds issued by Member States participating in an EFSF/ESM macroeconomic adjustment or precautionary program in the secondary market. Without the program having been activated, i.e. without the ECB actually implementing the decision and without any purchases of government bonds, yields on bonds of the affected Eurozone countries decreased markedly after the announcement of the OMT Decision. The OMT Programme has accordingly been credited with having been instrumental in restoring financial stability and preventing a breakup of the Euro area and with being one of the most effective announcements any central bank has ever made.

On 6 September 2012, the European Central Bank (ECB) published a press release on “Technical features of Outright Monetary Transactions.” In this press release, the ECB announced that it would purchase bonds of Member States participating in the European Financial Stability Facility (EFSF)/European Stability Mechanism (ESM) program on the secondary sovereign bond markets under certain conditions. Furthermore, it gave notice that there were no ex ante quantitative limits on the size of these outright monetary transactions (OMT). This OMT announcement of the ECB was challenged before the German Constitutional Court. In a 6:2 decision, the Court raised doubts with regards to the compatibility of the actions announced in the OMT press release with the rules governing the mandate of the ECB in the Treaty for the Functioning of the European Union (TFEU), and referred the case to the European Court of Justice (ECJ) for a preliminary ruling.

The German Federal Constitutional Court (FCC) ruling of 14 January 2014 deserves a thorough evaluation on several accounts: It is the first ever reference by the FCC to the Court of Justice of the European Union (CJEU), it represents a continuation of FCC case law aimed at restricting the impact of European Union law as interpreted by the Court of Justices of the European Union (CJEU) on German law as well as questioning Germany's participation in an ever closer European Union, and it has the potential to dictate the future course of the EU's Economic and Monetary Union (EMU).

It should be no surprise that a case can be made both for and against the legality of secondary market bond purchases by the European Central Bank (ECB), and of the Outright Monetary Transactions (OMT) Program in particular. It is also no secret that the ECB—like many other institutional actors in Europe—is in several ways testing the boundaries of legal provisions as a consequence of the financial and sovereign debt crisis. Still, the Bundesverfassungsgericht (Federal Constitutional Court) Order of 14 January 2014 on the OMT Program is surprising for several reasons.

Preliminary references by national constitutional courts are not an everyday occurrence in Union law. No surprise, therefore, that they attract considerable publicity and give rise to a significant amount of academic comment. However, the recent preliminary request of the German Federal Constitutional Court (GFCC) in Gauweiler constitutes undoubtedly the most important and historic preliminary reference made thus far by a constitutional court. This is not only because it is the very first preliminary request of this particular court, inaugurating potentially a whole new era in its institutional relationships with the Court of Justice and paving the way for other national constitutional courts to make more regular recourse to the preliminary reference procedure; but also because it relates to an issue of central importance for the process of European integration with far reaching economic and political repercussions.