Why a Recent Judgment by the German Bundesverfassungsgericht Might Introduce Climate Change Considerations into Monetary Policy

The recent judgement by the German Federal Constitutional Court (‘FCC’) has been widely criticised both for its legal reasoning and for its impact on the EU legal order. Nevertheless, it yields valuable lessons for the ECB. Even though the ECB is an EU institution and the Court of Justice of the European Union (‘CJEU’) had already confirmed that it acted within its mandate, the FCC emphasises that the EU Treaties impose certain procedural guarantees that must not be overstepped in order to keep EU institutions like the ECB accountable. For this reason, it urges the ECB to demonstrate greater transparency in conducting monetary policy.