16th Jun 2015 14:50
BERLIN (Alliance News) - Germany's highest court will now have the final say on the legality of the European Central Bank's bond-buying programme after it was cleared by the European Court of Justice.
In declaring the programme legal on Tuesday, the Luxembourg-based ECJ rejected challenges raised against the ECB scheme by a group of German lawmakers, academics and economists.
The critics, among them both conservative and left-wing politicians, had argued that the ECB's plan to buy the debt of nations at the centre of the euro debt crisis would result in losses for the bank as well as for eurozone members such as Germany.
Set out under the ECB's so-called Outright Monetary Transactions (OMT) plan, the scheme was unveiled in 2012 following ECB chief Mario Draghi's pledge to do "whatever-it-takes" to save the common currency.
The OMT programme was never activated, but it paved the way for the ECB's broad-based EUR1.1-trillion quantitative easing scheme, which was launched in March and was aimed at spurring economic growth in the 19-member eurozone. The programme is due to run until September next year.
The ECJ's decision was widely expected after a court advisor had given the go-ahead to the scheme in an opinion released in January.
In handing down its ruling, the court said Tuesday that the bond-purchasing scheme "falls within monetary policy and within the powers" of the European system of central banks, which is headed up by the ECB.
The ECB welcomed Tuesday's ECJ decision.
"There is a sense of satisfaction that the European Court of Justice has confirmed that we have done our work earnestly and have carried out our responsibilities legally," said Yves Mersch, a senior ECB official said in Brussels.
But Peter Gauweiler, a German Christian Democrat who had been among those to refer the case, likened it to "a declaration of war for the Federal Constitutional Court."
The European Parliament's Economic and Monetary Affairs Committee chairman, Roberto Gualtieri, said the ECJ ruling provided "a very important and timely clarification from the EU's highest court and will contribute to the stability of the euro area and of the EU at large."
Had the court rejected the ECB's programme, it could have thrown the ECB's strategy for boosting the eurozone's fortunes into doubt, triggering turmoil on the financial markets.
The Karlsruhe-based Constitutional Court is likely to conform to the ECJ's decision, although its own ruling is not expected until next year.
Copyright dpa