## Facts

- The European Central Bank (ECB) announced the Outright Monetary Transactions (OMT) program in 2012 to purchase government bonds on secondary markets to stabilize the Eurozone during the sovereign debt crisis.
- The legality of the OMT program was challenged, with claims that the ECB had exceeded its mandate and infringed on Member State sovereignty.
- Preliminary reference questions were submitted on the program’s compatibility with EU law, particularly Article 127 TFEU and the proportionality principle.
- The case examined the allocation of economic and monetary policy powers between the European Union and Member States.
- National courts requested clarification regarding the ECB's authority and the legal framework for judicial review of its actions.

## Issues

1. Whether the OMT program exceeded the ECB's mandate under Article 127 TFEU.
2. Whether the OMT program violated the principle of proportionality under EU law.
3. Whether the supremacy of EU law limits national courts from reviewing or invalidating ECB measures based on national constitutional law.
4. What limits exist on the ECB’s discretion in formulating and implementing monetary policy.
5. How judicial review by the CJEU safeguards the legality of complex EU monetary policy measures.

## Decision

- The CJEU held that the OMT program fell within the ECB’s mandate under Article 127 TFEU, as its primary aim was maintaining price stability.
- The Court concluded the proportionality principle was fulfilled, deeming the OMT program suitable and necessary for its intended objectives.
- The supremacy of EU law was reaffirmed, precluding national courts from annulling ECB acts by reference to national law.
- The ECB was held to have wide discretion in monetary policy, provided it acts within the limits of the Treaties.
- The CJEU confirmed its supervisory role in reviewing the legality of EU institutional acts affecting monetary policy.

## Legal Principles

- Article 127 TFEU grants broad authority to the ECB and the European System of Central Banks relating to the maintenance of price stability.
- The proportionality principle requires that EU measures be appropriate and not go beyond what is necessary to achieve their objectives.
- The supremacy of EU law prevents national courts from invalidating ECB actions using national constitutional provisions.
- Judicial review by the CJEU ensures that EU institutions act within their conferred powers.

## Conclusion

The CJEU upheld the lawfulness of the ECB’s OMT program under Article 127 TFEU and the proportionality principle, reaffirmed the supremacy of EU law, and clarified the balance of economic and monetary policy powers between the EU and Member States.

Gauweiler v Deutscher Bundestag (Case C-62/14), ECLI:EU:C:2015:400