Eurosceptics' complaint against ECB policy fails
Emergency appeals against the purchase of government bonds have been rejected by Germany's Federal Constitutional Court. The plaintiffs wanted the court to stop Germany's central bank, the Bundesbank, from participating in the ECB's bond-buying programme. Some commentators criticise the court as cowardly. Others name reasons why using legal means to stop quantitative easing would be wrong.
State of emergency is now normality
The courts aren't bold enough to block the bond-buying programme, the Frankfurter Allgemeine Zeitung criticises:
“The ECB has overstepped its monetary mandate. With the purchase of government bonds it is using monetary means to finance states and is thus becoming the biggest creditor of the member states, the constitutional court said two months ago when it couldn't pluck up the courage to make a ruling. So it's only logical that it's now rejected the emergency appeals to allow Germany to continue participating in the ECB's controversial second bond-buying programme. The ECJ is likely to adopt the view that the ECB's policy is in line with the treaties, as it did in the row over the first bond-buying programme. So what's the upshot? Ten years after the financial crisis first broke out there's still no return to a normal monetary policy even though the economy is thriving.”
Euro crisis could make a comeback
The cause of the Eurosceptics' complaint may soon cease to exist anyway, the taz writes:
“ECB chief Mario Draghi has already hinted that the central bank is likely to end the bond-buying programme in 2018. ... What will actually happen if the ECB stops buying government bonds? At the moment it is still investing 60 billion euros per month in this. With this expansive monetary policy it kept interest rates - and by extension the euro exchange rate - low. European goods are therefore cheap enough on global markets that even the EU's crisis countries can export considerably more. Put crudely, the ECB has saved Chancellor Merkel's ass. Merkel didn't have to worry about the euro crisis because the ECB's monetary policy did the job, at least initially. But if the central bank stops buying bonds this issue could catch up with the chancellor.”