'Brace For Impact' - Germany says European Central Bank’s quantitative easing illegal.(RT).
Germany’s constitutional court said the European Central Bank’s bond-buying program- Outright Monetary Transaction (OMT) - “infringes” on the powers of individual nations, a claim the ECB has flatly denied.
ECB takes note of announcement made today by German constitutional court. ECB
reiterates that the OMT programme falls within its mandate
— ECB (@ecb) February 7, 2014
The OMT program was launched in response to the European debt crisis in
September 2012 under ECB President Mario Draghi, and is credited with helping
the flagging euro currency make a market comeback. Under the program the
Governing Council of the ECB buys in secondary, sovereign bond markets the
obligations issued by Eurozone members. “In the view of the Senate, there are important reasons to assume that it exceeds the European Central Bank’s monetary policy mandate and thus infringes the powers of the member states, and that it violates the prohibition of monetary financing of the budget,” the court said on its website.
The main “infringement” is that sterilization, a conservative policy measure used to stabilize the euro during the crisis - once abolished, could pump nearly $237 billion (175 billion euro) into the economy, Reuters reports. This would bring calm to euro zone currency markets.Read the full story here.
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