KARLSRUHE, Germany: The European Central Bank defended in Germany’s highest court yesterday a controversial bond purchase scheme that is credited with pulling back the eurozone from the brink of collapse last year.
The Constitutional Court has been asked by critics of the ECB’s “Outright Monetary Transactions” to examine whether the scheme is in line with German law or whether it breaches the central bank’s mandate.
The plaintiffs, a diverse group of German politicians, lawyers and citizens, argue the ECB is creating risks for German taxpayers that their elected representatives cannot control. But the ECB insists that the OMT is in line with its mandate to safeguard price stability.
“The announcement of OMT was and is the necessary and appropriate step to eliminate the disruption in the transmission of monetary policy caused by concerns that there would be an unwanted break-up of the euro,” the ECB witness Joerg Asmussen, told the court.
“I am firmly convinced that introducing the OMT programme was the right thing to do to ensure price stability in the euro area,” he said
AFP
