Order of 14 October 2026
2 BvE 7/20, 2 BvR 420/21
PEPP
In an order published today, the Second Senate of the Federal Constitutional Court dismissed two proceedings directed against the Pandemic Emergency Purchase Programme (PEPP) of the Eurosystem.
In their Organstreit application and constitutional complaint, respectively, the applicant and the complainants assert that the decisions of the Governing Council of the European Central Bank (hereinafter: ECB Governing Council) underlying the programme amount to ultra vires acts.
The proceedings were unsuccessful. The submissions in both proceedings do not satisfy the substantiation requirements. An ultra vires act must be established by engaging with the arguments submitted by the relevant actors regarding a competence dispute. Within the range of opinions expressed during such a dispute, the view of those bodies to which the Constitution primarily assigns responsibility with regard to European integration (Integrationsverantwortung) and for preventing ultra vires acts – in particular the Federal Government, the Bundestag and, where applicable, the Bundesrat – is an important factor when these bodies have substantially examined the measure at issue, including the possibility of a breach of competences. To be admissible, an ultra vires complaint must therefore address the reasoned position held by the Federal Government, the German Bundestag and, where applicable, the Bundesrat regarding the boundaries of EU competences. The submissions in the present case fail to sufficiently do so.
Facts of the case:
The PEPP was a Eurosystem programme for the purchase of public and private sector securities, which was designed as a flexible emergency programme. It was intended to ensure that all sectors of the economy could benefit from supportive financing conditions in order to mitigate the effects of the economic shock triggered by the COVID-19 pandemic and the associated risks to price stability.
The PEPP was established by decision of the ECB Governing Council dated 24 March 2020; its overall volume was gradually increased to a maximum of EUR 1,850 billion. The vast majority of asset purchases made under the PEPP were public sector securities.
After a gradual reduction in asset purchases from September 2021 onwards, the programme was discontinued by the end of 2024. The existing portfolio has not been fully dismantled yet. According to information provided by the ECB, the portfolio is declining at a measured pace.
The applicant and the complainants assert that the Federal Government and the German Bundestag violated their responsibility with regard to European integration. They argue that the Federal Government and the Bundestag should have taken steps to ensure that the decisions of the ECB Governing Council underlying the programme are repealed or not implemented, because they consider these decisions to constitute ultra vires acts. Namely, they contend that the ECB has exceeded the limits of its monetary policy mandate and claim a violation of the prohibition of monetary financing of Member State debts.
Key considerations of the Senate:
The application in the Organstreit proceedings and the constitutional complaint are inadmissible.
In particular, neither the Organstreit application nor the constitutional complaint satisfy the special substantiation requirements applicable to claims that an act has exceeded competences in a structurally significant and manifest manner.
1. A measure manifestly exceeds the competences conferred on EU bodies only when, in applying common methodological standards, a competence cannot be established under any legal point of view. The claim of an ultra vires act must therefore be substantiated by engaging with the arguments presented by the relevant actors regarding a competence dispute.
Within the range of opinions expressed during such a dispute, the view of those bodies to which the Constitution primarily assigns responsibility with regard to European integration and for preventing ultra vires acts – in particular the Federal Government, the Bundestag and, where applicable, the Bundesrat – is an important factor when these bodies have substantially examined the measure at issue, including the possibility of a breach of competences. To be admissible, an ultra vires complaint must therefore address the reasoned position held by the Federal Government, the German Bundestag and, where applicable, the Bundesrat regarding the boundaries of EU competences.
2. Based on these standards, neither the applicant’s nor the complainants’ submissions satisfy the substantiation requirements for an ultra vires complaint.
a) The German Bundestag and the Federal Government have assessed the PEPP. The programme was the subject of several plenary debates; it was discussed in Bundestag committees and in the framework of the Bundestag’s Monetary Policy Dialogue [a format of regular hearings and accounts on monetary policy]. In the context of these discussions, the boundaries of EU competences were a particular focus.
b) In light of the foregoing, the submissions regarding the possibility that the ECB, in adopting the decisions underlying the PEPP, exceeded its competences in a qualified manner lack the required detailed reasons.
aa) The applicant and the complainants fail to substantiate that the ECB exceeded the limits of its monetary policy mandate. They neither substantiate that the ECB Governing Council failed to show that the PEPP is proportionate, nor do they sufficiently demonstrate that the proportionality considerations put forward by the ECB Governing Council are not comprehensible.
(1) The ECB Governing Council consistently set out its considerations regarding the proportionality of the PEPP. It cannot be derived from the submissions in the present proceedings how this could amount to failure on the part of the ECB to demonstrate the PEPP’s proportionality.
(2) In substance, the ECB Governing Council extensively addressed the proportionality of the PEPP.
(a) It categorised the programme as suitable and necessary to counter the serious risks that the pandemic posed to price stability and to the monetary policy transmission mechanism. The ECB Governing Council also addressed proportionality in the strict sense in a number of monetary policy meetings; it discussed the programme’s economic policy effects and its indirect impacts. The relevant political actors for the most part considered these considerations of the ECB Governing Council to be plausible.
(b) The applicant and the complainants do not substantiate that – contrary to the prevailing opinion in politics and legal scholarship – the assessments of the ECB Governing Council are not comprehensible. In particular, they fail to address the special circumstances under which the PEPP was adopted.
bb) Nor do the applicant or the complainants substantiate a manifest violation of the prohibition of monetary financing.
(1) Art. 123 of the Treaty on the Functioning of the European Union (TFEU) prohibits the monetary financing of Member State debts by the European System of Central Banks (ESCB); it contains a prohibition on circumvention, which must be observed when the Eurosystem purchases government bonds on the secondary market. Monetary financing of Member State debts is also impermissible in the framework of a crisis-related emergency programme. It is now settled case-law of the Court of Justice of the European Union (CJEU) and of the Federal Constitutional Court that the assessment of whether a programme for the purchase of government bonds violates the prohibition of monetary financing may, in principle, rely on the ‘safeguards’ set out by the Court of Justice in its Gauweiler judgment. Whether these ‘safeguards’ are sufficient must be examined in an overall assessment on a case-by-case basis.
(2) Due to the need for great flexibility as set forth by the ECB Governing Council, several aspects of the PEPP differ from previous asset purchase programmes with regard to the aforementioned ‘safeguards’ – which include a quantitative limit on the volume of asset purchases set in advance, the allocation of purchases in accordance with the key for capital subscription set out in the Statute of the ESCB, a minimum period between the issue of a security on the primary market and its purchase by the ESCB on the secondary market, compliance with credit quality requirements and the establishment of a binding exit scenario.
In view of the pandemic, however, the ECB Governing Council considered it absolutely necessary to be able to act and respond flexibly and concluded that sufficient safeguards were in place to rule out a violation of the prohibition of monetary financing.
The German Bundestag also addressed the ‘safeguards’ developed in the case-law; it engaged with the question of how the PEPP differed from previous asset purchase programmes regarding compliance with these safeguards. The Bundestag concluded that the programme adhered to the allocation of competences and therefore did not require intervention. The Federal Government likewise assumed that the measures taken did not exceed the ESCB’s mandate.
(3) In light of these considerations, the applicant and the complainants fail to sufficiently demonstrate a possible violation of the prohibition of monetary financing.
The applicant fails to substantiate non-compliance with even a single ‘safeguard’ on the basis of the assessments of the ECB Governing Council, the German Bundestag and the Federal Government. Moreover, the submissions completely lack the necessary overall assessment.
The complainants’ submissions regarding the specific ‘safeguards’ are also inadequate and do not provide an overall assessment that sufficiently takes into account the particular context of the PEPP. In particular, the complainants do not give enough consideration to material factors to be included in the overall assessment, namely the unpredictability of the crisis caused by the pandemic and the uncertainties regarding economic developments and the rate of inflation entailed by it as well as the monetary policy responses of the ECB Governing Council.