• Germany: German TC sees traits of illegality in ECB purchasing program

The Governing Council of the European Central Bank (ECB) has convened an emergency meeting for Tuesday afternoon to discuss the ruling of the German Constitutional Court regarding the euro area debt purchase program launched in 2015.

The Governing Council will meet in an extraordinary way as a matter of urgency by teleconference and could pronounce later, the entity has assured.

The German Constitutional Court declared this Tuesday morning partially contrary to the country's Constitution, the ECB's debt purchase program launched in 2015 by the then president of the institution, Mario Draghi .

As the TC president, Andreas Voßkuhle , has commented , in spreading the sentence, with this program the ECB exceeded its powers, although the Court does not rule on the proportionality of this strategy to increase inflation and requires that its justification be justified a posteriori. suitability.

It also leaves room for the Bundesbank (German central bank) to continue participating in the bond purchase program, if the ECB Council approves, within three months, a resolution explaining that the purchase program Bond is adequate and proportional.

Commission Warning

The European Commission has also ruled on the judgment of the German TC, which has reminded the court that the decisions of the Court of Justice of the European Union (CJEU) are binding on all national courts.

"We reaffirm the primacy of EU law and the fact that the resolutions of the EU Court of Justice are binding on all national courts," Commission chief spokesman Eric Mamer said at the daily press conference. of the institution.

However, Mamer added that the Commission has yet to analyze in detail the judgment of the German Court and made it clear that "the Commission has always respected the independence of the ECB in its implementation of monetary policy".

Rebound in premiums

The failure of the German Constitutional Court has caused a slight rise in the risk premiums of the peripheral countries, whose debt is being the most pressured by the doubts of investors regarding the coronavirus.

The Spanish indicator stood at 140 integers , compared to 138 the day before, with the yield on the 10-year bond at 0.83%, compared to -0.57% for the German bund that is taken as a reference.

For its part, Italy's risk premium has risen to 242 points, from 234 on Monday; that of Portugal , up to 145 from 141, and that of Greece , up to 273 from 270 at the beginning of the week.

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  • Mario Draghi
  • European Comission
  • economy

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