Models of Solidarity in the EMU. The Impact of COVID-19 After Weiss

Abstract

Right in the middle of the Covid-19 pandemic, the German federal constitutional court (Bundesverfassungsgericht – FCC) issued a ruling that sent massive shockwaves through the continent. Not only did the Court question the legality of the European Central Bank’s bond buying program PSPP (Public Sector Purchase Program), but it also rejected the earlier decision by the CJEU in which this latter had found that program to respect EU law. The ruling is as such not directly concerned with Covid-19 measures, but it may have nonetheless important consequences thereon. In this contribution we will explore what those consequences may be. Apart from the direct effects on the ECB’s pandemic emergency purchase programme (PEPP), we zoom in on the ruling’s indirect consequences on the broader question of how to arrange solidarity in EMU. With regard to the latter, we contend that Weiss and the Covid-19 crises combined will test the basic models of solidarity the EMU relies upon: the models of individual fiscal responsibility, ECB based solidarity and the model of fiscal union. These models are assessed from economic, constitutional and democratic perspectives.