Monetary policy for the Eurozone after the OMT judgment

Brussels, 22 October 2015

On 16 June 2015 the European Court of Justice rendered its judgment in case C-62/14 (also known as ‘Gauweiler’) on the EU legality of ECB’s ‘Outright Monetary Transactions’ programme (OMT). The Court decided, upon the first reference from the German Constitutional Court, that the ECB acted still within the boundaries of its powers and of EU law when announcing the OMT.

The judgment raised many questions:

  • How will the German Constitutional Court that was clearly opposed to the legality of the OMT respond to the judgment?
  • What would be the consequences of a judgment by the German Constitutional Court declaring that the OMT violates the German constitution?
  • What is the impact of the judgment on the legal framework for future unconventional monetary policy measures such as ‘Quantitative Easing’?
  • What is the impact of this judgment and a future judgment of the German Constitutional Court on the economic situation in the Eurozone?
  • How to draw, based on the ‘OMT’ and the previous ‘Pringle’ judgment, the dividing line between economic policy (within Member States’ competence) and monetary policy (within ECB’s exclusive competence)?

The discussion turning around these very concrete questions relating to the ‘OMT judgment’ have furthermore to be placed into the broader context of unconventional monetary policy measures, their economic necessity and the legal boundaries for their adoption.

In order to address all these questions the European Research Centre for Economic and Financial Governance (EURO-CEFG) organises an expert dialogue in Brussels and invites In the interdisciplinary spirit of the centre with Prof. Dr. Martin Nettesheim (who was representing the German ‘Bundestag’ in the proceedings in front of the German Constitutional Court) and Prof. Dr. Casper de Vries two outstanding experts in the field of law and of economics. Both experts will enrich the roundtable debate with their different academic perspectives on the questions raised by the ‘OMT judgment'.

Martin NettesheimMartin Nettesheim is Professor of Law at the University of Tübingen Law School since 2000. He is chaired Professor for German Public Law, Public European Community Law, International Law and International Political Theory and Director of the Tübingen University Center for International Economic Law (TURCIEL).  He studied law at the Universities of Freiburg, Berlin and Ann Arbor (MI), He also holds a degree in Economics. Professor Nettesheim has taught courses at various universities (Berkeley, Miami, Nanjing, Kyoto). He has served as Dean of the Law School (2003-2005) and is Member of the Board of the Center for Studies in Federalism at the University of Tübingen. He chairs the Working Group on European Constitutional Law within the Association of German Professors of Public Law. Professor Nettesheim has published comprehensively in the areas of EU law, International Economic Law and German Constitutional Law. He is editor of a multi-volume commentary on the Treaties on the European Union (Grabitz/Hilf/Nettesheim, Das Recht der Europäischen Union, 2010) and author of a comprehensive introduction to EU law (Oppermann/Classen/Nettesheim, Europarecht, 6th ed. 2014). His current projects include a book about democratic theory in settings of multi-level governance and a publication about the protection of personal privacy.

Casper de vriesCasper de Vries holds the chair of Monetary Economics at the Erasmus School of Economics, Erasmus University Rotterdam, and co-heads the risk management program at the Duisenberg School of Finance. Casper is a fellow of the Tinbergen Institute, he is a member of the Sociaal Economsiche Raad (Dutch Council of Economic Advisors), the Wetenschappelijke Raad voor het Regeringsbeleid (Scientific Council of the Government) and is active as a consultant for pension funds. He headed national committee on insurance. His graduate training was received at Purdue University, after which he held positions at Texas A&M University and KU Leuven. He has been visiting scholar at several European and American research institutes and central banks. He has served as vice dean of research and education at the Erasmus School of Economics..

Casper De Vries’s research interests are focused on international monetary issues, like foreign exchange rate determination and exchange rate risk, the issues surrounding the Euro, financial markets risk, risk management and systemic risk and, last but not least, applied game theory. In his research on financial risks, Casper has specialized in calculating the risks on extreme events by means of statistical extreme value analysis. Casper also takes an active research interest in contest and auction theory, which can be applied to the theory of lobbying. He has published widely in leading internationally refereed journals, like the journal of econometrics, the journal of economic theory, the American economic review and the review of economics and statistics.