The ECB responds to the German consultation: “The commitment to do what is necessary remains. The EU Court has ruled that we act on mandate”

The commitment to “do remains everything necessary “and remember the pronunciation of Court of Justice of the EU who determined that the Quantitative easing It is part of the mandate. For now, the European Central Bank’s response to the ruling issued by the German constitutional court. A message to markets, to avoid at least immediately new tensions on government values, but also the reference to the decision of the Luxembourg judges who, on appeal from the German judges who asked for clarification, in 2018 he was correct to the ECB.

The European Central Bank “takes note of today’s ruling of the Federal Constitutional Court of Germany on PSPP“Y” remains fully committed to doing what is necessary in its mandate to ensure that l‘inflation get on consistent levels with its medium-term objective and that the monetary policy actions taken towards the objective of maintaining the price stability they are transmitted to all parts of the economy and in all jurisdictions of the euro area, “reads the note. Then it concludes:” In December 2018, the Court of Justice of the European Union ruled that the ECB is acting in compliance with its mandate. “

Eurotower’s note came at the end of the institute’s board meeting to obtain information on the German court’s decision. The judges of Karlsruhe have recognized that quantitative easing does not violate the ban monetary financing. But they accepted another part of the appeal: the EU Court, they write in very harsh tones, did not adequately assess whether the plan respects the proportionality principle between costs and benefits. For this, within three months, the ECB is called to demonstrate it “in a proven and understandable way”, otherwise Bundesbank can no longer take part to the government bond purchase plan.

In the ECB’s first response there is no trace of an answer regarding this clarification. The President of the Bundesbank, Jens Weidmannhas already declared its commitment to support “compliance of this task, respecting the independence of the Governing Council of the ECB. “And also the chancellor Angela Merkel He stressed that “the High Court clearly shows its borders to the ECB.” At the same time, the Karlsruhe judges specified that today’s decision does not apply the measures taken “in the context of the current crisis since coronavirus“

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