Brussels, 28/07/2014 (Agence Europe) - Following the appeal lodged by five German professors at the German constitutional court in Karlsruhe against plans for banking union, the European Commission expressed confidence on Monday that all precautions had been taken to ensure compliance with EU law.
Welt am Sonntag reported at the weekend that five German professors had decided to challenge banking union at the court in Karlsruhe. One of them, Markus Kerber, told Welt am Sonntag that banking union does not have a sound legal basis and violates fundamental rights.
In the autumn, the European Central Bank will start directly supervising almost 140 banks. A bank resolution mechanism has been devised, along with a bank resolution fund (SRF) financed by banks themselves that will build up to capital of €55 billion.
The five professors see potential conflicts of interest, because the ECB Governing Council will have the right to veto decisions about bank supervision, although it will not have the power to amend the decisions. The professors say that European decision-makers had done what they could to avoid changing the EU treaties, but the professors feel a treaty change is necessary. They accuse the German finance minister of deceiving the public by playing down the risks of banking union.
The Commission refused to comment on the substance of the complaint because it has only seen press reports on the case, but said on Monday 28 July: “We fully respect the right of EU citizens to start legal proceedings”. “That said, banking union is fully in line with the EU treaties, we had the opportunity to extensively communicate on this when our proposal was under negotiations at the European Parliament and Council”, commented the Commission, adding: “We are confident that the legislative texts underpinning banking union are legally sound and solid. It is worth recalling that the ECB and the Council's legal service share our views”.
In a press release cited by Reuters, the German Ministry of Finance said that it had studied the basis of banking union with its legal department and considered it constitutional. The Karlsruhe court has in the past been called upon to rule on the European stability mechanism (the eurozone's permanent bailout fund) and more recently on the OMT bond purchase programme at the ECB, which was later transmitted to the European Court of Justice. (EL)