The European Central Bank yesterday was forced to reiterate that "there are limits" to the anti-spread shield to deny rumors of the press in Germany on the eve of a hearing of the German Constitutional Court which may call into question the buy-back program securities for countries in difficulty.
According to an article in the Frankfurter Allgemeine Zeitung, the ECB president, Mario Draghi, would be ready to impose a limit of 524 billion euro program Outright monetary transactions (UNWTO), in complement to the ESM bailout fund to assist those countries most vulnerable in the event of another crisis in the financial markets. "The reconstruction of Faz is not correct: there are no ex ante limits to the amount of purchases that can be made under the program Omt," responded a spokesman for the ECB. Who added: "The amount will be adjusted to achieve the planned objectives." The specification serves to reassure markets that especially in recent weeks, they came back to show signs of nervousness, fueling the spread volatility of Italy and Spain.
The anti-spread shield the ECB is "necessary to an economic point of view, legally permitted and effective in its impact," confirmed Joerg Asmussen, the German member of the board of directors of the Eurotower, in an interview with the weekly Bild. He will defend the ECB before the judges in Karlsruhe at the hearing tomorrow and Wednesday, after the program UNWTO has been challenged by a group of politicians, economists and German lawyers. It will be a showdown between the ECB and Bundesbank President Jens Weidmann, who, after having voted against the shield in September, has continued to criticize the program of bond purchases by the ECB. In his indictment, Weidnmann should support the UNWTO is legally questionable to term limits of the ECB, economically harmful to inflation and politically counterproductive because it discourages fiscal consolidation.
DECISION IN SEPTEMBER
The decision of the Constitutional Court should not arrive before the German elections in September and a rejection seems unlikely: the Karlsruhe judges will have to examine whether the program Omt respects the constitutional principle of control of the Bundestag on budgetary issues, but their jurisdiction does not extend the ECB. However it is not excluded that may seek to erect safeguards MTO, maybe remanded the case to the European Court of Justice in Luxembourg. Asmussen said he did not feel impeached and recalled that the ECB has adopted the UNWTO during the most acute phase of the crisis, when the euro zone was "close to an uncontrolled collapse." Markets "got the message" without that the ECB has had to spend a single euro to help countries in difficulty, assured Asmussen.
DRAGONS IN THE FIELD
In the eyes of the ECB, the anti-spread shield is needed to restore the correct transmission of its monetary policy. Thursday, Draghi was also taken the field to defend the program, explaining that the OMT is "probably the measure of monetary policy adopted most successful in recent times." Not only has it helped to stabilize the euro zone, "but also the global markets," he added. But a judgment even the slightest criticism of Karlsruhe is likely to create new uncertainty, boosting the euro zone crisis.
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