Is the ECB out of control?
In the German constitutional court ECB member of the board Yves Mersch qualifies European Monetary Union as a fully fledged community of liability.
The president of the German constitutional court Andreas Voßkuhle had summoned the different attorneys in the early morning of 16 February to plan the audience of the day. He suggested that in early afternoon the very latest hearing would be over. What a miscalculation.
In late afternoon it became clear that the court’s historic judgement on whether or not the ruling of the European Court of Justice on outright monetary transactions (OMT) as of 16 June late year would be a heated debate.
Although never been put into practice, OMT would allow ECB to purchase unlimited amounts of public bonds to support fragile countries of the Eurozone and prevent them from defaulting a life insurance for Italy, France & Co.
In the European Court’s ruling, the ECB’s programme was given clearance by saying that in as much as the ECB intends to conduct monetary policy, it is supposed to comply with the European treaties. But the ECB must not distort competition on the security markets.
The represented attorneys of the different plaintiffs contested the conformity of OMT with European law and made a strong plea to the German constitutional law to reject the judgement and to declare it as incompatible with European law.
The decision by the German constitutional court not to be expected soon would have historic impact on the institutional economics of the European community. Will there be a conflict between Germany and Luxemburg?