Germany’s Constitutional Court has said it thinks the European Central Bank’s bond-buying plan exceeds the ECB’s mandate and violates a ban on it funding governments.
But the court is not going to block it and instead is referring the case to the European Court of Justice.
In September 2012 the ECB promised potentially unlimited purchases of eurozone government bonds.
It has never done that, but the move was widely credited with stabilising the euro at the height of the sovereign debt crisis.
It calmed fears about the eurozone falling apart and backed up ECB President Mario Draghi’s vow to do “whatever it takes” to save the euro.
Germany’s Bundesbank is opposed to the plan which is why the country’s Constitutional Court was asked to consider whether it conforms with German law.
A decision from the European Court of Justice could take up to two years and legal experts said the ECJ is more likely to rule in the ECB’s favour.
“Practically speaking, the Court of Justice is not an independent organisation but is pre-disposed to interpret legal questions in the interest of the European Union,” University of London European Law expert Gunnar Beck said.
“The court of justice doesn’t take account of national sensibilities … there is no doubt of the outcome now.”