BERLIN (AP) — Germany's highest court on Friday questioned the legality of key parts of the European Central Bank's 18-nation euro zone rescue plan, taking the unusual step of asking the EU's courts for an opinion. Ta.
The case involves the so-called Outright Financial Trading Program, which allows the ECB to buy the bonds of euro zone member countries in crisis as an emergency measure. Although the program has never been used, its mere existence is credited with easing the bond market turmoil that threatened the euro zone.
The ECB's bond-buying proposal has significantly lowered borrowing rates for countries such as Spain and Italy, allaying fears that countries could default on their debts and drop out of the euro.
However, opponents argue that such bond purchases can accelerate inflation and amount to government financial financing, which is prohibited under the ECB's mandate, and a German court has found that this argument has a point. It showed that it might be possible.
In a statement explaining why it had referred the matter to the European Court of Justice, Germany's Constitutional Court said that the ECB's bond purchase program exceeded the bank's mandate and “therefore constitutes an important presumption that it infringes on the powers of member states.” He said there was a reason. . ”
Some analysts believe the Luxembourg-based European Court of Justice is more favorable to the ECB, and the German court's decision to delegate the decision to it could work in the ECB's favor.
“This announcement should clearly alleviate the concerns in Karlsruhe for the ECB,'' said Carsten Brzeski, chief economist at ING Diba Bank, referring to the city of Karlsruhe, where Germany's courts are located. Ta. “But it is not perfect. It cannot be taken for granted that the European Court of Justice will only rubber-stamp the OMT program.”
Bart van Roosbeke, a banking expert at the Center for European Politics in Freiburg, Germany, said the final outcome was still open and a decision should not wait months.
The ECB said in a statement that it “takes note” of the decision.
