07-02-14

German Court Defers to Europe on Bond-Buying Plan

A German federal court on Friday said it would refer a complaint against the European Central Bank’s bond-buying plan to the European Court of Justice.

... The German court also said on Friday that the European Central Bank might have violated a ban on its funding governments. However, it also said in a statement that it “also considers it possible that if the O.M.T. decision were interpreted restrictively,” it could conform with the law. Reacting to the German court’s announcement, the European Central Bank stood by the program’s legality, saying in a statement: “The E.C.B. reiterates that the O.M.T. program falls within its mandate.” The European Court of Justice in Luxembourg has a reputation for giving forward-leaning federalist rulings that take a broad interpretation of European institutions’ powers, so analysts said there was less of a risk that it would obstruct the program. “The chances are better in Luxembourg than in Karlsruhe,” said Bert Van Roosebeke of the Center for European Politics in the German city of Freiburg. ...read more