Droit et Économie - L'avenir de l'Union économique et monétaire : une perspective franco-allemande - 181

THE ROLE OF CENTRAL BANKING IN EMU 181

capital. This implies that 20% of the asset purchases under the PSPP can
become subject to a regime of risk sharing between the NCB's, while the
risks under the remaining 80% of the programme are borne by the individual
NCBs. The risk sharing model is complemented by two fundamental provisions. First, the distribution of purchases across jurisdictions shall be in accordance with the key for subscription of the ECB's capital under Article 29 of the
ESCB Statute. Second, each NCB buys securities issued by issuers of its own
jurisdiction while securities issued by European institutions will be purchased
by all NCBs.71 In practice, this means that each NCB takes mainly the credit
risk of its Member State, which is lower in the case of Germany and higher,
e.g., in the case of Italy. The nominal amount of purchases made by a NCB
depends on two factors: its capital share in the ECB's capital and the overall
amount of purchases made by the Eurosystem.
In a reference for preliminary ruling of 15 August 2017, the Bundesverfassungsgericht requested the CJEU to answer several questions on the legality
of the PSPP under Articles 127 and 123 TFEU.72 The Bundesverfassungsgericht raises doubts as regards the practical implementation of the PSPP
insofar that the Eurosystem conveys the impression of certainty to market
participants that it will buy in fact all sovereign bonds offered to it, that all
debt instruments are held until maturity, and that it acquires instruments
with a negative yield, too.73 Regarding Article 127 TFEU, the Bundesverfassungsgericht asks the CJEU whether the high volume and the long-term
orientation of the PSPP are in conformity with the ECB's mandate and
the principle of proportionality.74
While early asset purchase programmes had been adopted by ECB with a
view to smoothen severe tensions in the financial markets,75 this justification had lost of its immediate relevance when the PSPP started in 2015.
Rather, the ECB argued with the ongoing risks of deflation in the euro
area.76 From a legal point of view, preventing deflation (if it actually occurs)
constitutes an objective that is clearly covered by Article 127 (1) TFEU. Yet,
maintaining the programme in the long run could create new risks for the
functioning of the Eurosystem. Regardless of whether the securities were
71. Article 6 (3) of the Decision (EU) 2015/774 of the ECB (note 41).
72. Bundesverfassungsgericht, decision of 15 August 2017, 2 BvR 859/15 and others, available under
https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/DE/2017/bvg17070.html (accessed on 23 August 2017).
73. Bundesverfassungsgericht (note 72), para 80-99.
74. Bundesverfassungsgericht (note 72), para 100-123.
75. See e.g. the Securities Markets Programme (SMP) of 14 May 2010 (OJ 2010 L 124/8) that had
the objective to restore an appropriate monetary policy transmission mechanism, and thus
the effective conduct of monetary policy oriented towards price stability in the medium term.
76. Recital 3 of Decision (EU) 2015/774 (note 41).

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