OMT

Germany flagTC

German Court Agrees OMT Complies With Law

The challenge for German judges was to determine if the OMT can be seen as monetary financing of governments or not, banned in EU treaties or not. The Constitutional Court in Karlsruhe has ruled on Tuesday the ECB’s 2012 bond-buying plan is legal. Ifo President Clemens Fuest has, however, has critisised the OMT ruling. “That is a shame because it is obvious that the OMT programme primarily pursues the fiscal goal of preserving highly indebted states’ access to credit”.


money1

QE and OMT are not the same thing

PARIS | By Francesco Saraceno | I think it is important to clarify once more that QE and the OMT (welcome to the wonderful world of EU acronyms) are not the same thing. If Mario Draghi manages to rally the Governing Council behind him, QE will consist of a vast program of sovereign bond purchases, in order to try to lift the European economy out of deflation. A European version in short, of what was done three years ago by the Fed and other major central banks in the world.


No Picture

EU Court’s green light for QE

MADRID | By J.P. Marín Arrese | In the OMT case brought before the EU Court of Justice by the German Constitutional watchdog, the Advocate General has delivered a positive opinion. As the Court usually follows such opinions, the last hurdle for implementing the planned QE has been lifted. Yet, the Advocate General sets a number of requirements that will curtail the ECB’s room of manoeuvre.


OMT

EU: Challenged OMT is back in town

MADRID | The Corner | The European Central Bank’s Outright Monetary Transaction (OMT) will be back on the front pages on Tuesday. The European Court of Justice (the EU’s highest tribunal) will have to respond to the challenge of German judges, who said the OMT can be seen as monetary financing of governments, banned in  EU treaties. “Every time the monetary union takes a step forward, German individuals and/or civil or political groups file a case with the Constitutional Court in Karlsruhe,” our senior analyst Luis Martí commented.


No Picture

Germany feels sure about European rescue fund- not ECB’s OMT

MADRID | By Julia Pastor| German judges are removing uncertainties little by little. The country’s Constitutional Court confirmed on Tuesday that the European Mechanism of Stability is legal and does not damage the Bundestag’s budget. Furthermore, they also approved euro zone’s fiscal pact. The court had brought an appeal against constitutionality of both treaties in June of 2012. The third appeal regarding ECB’s bond purchase program is still pending of a sentence, however, and apparently it would be more difficult to solve: Karlsruhe’s court has required European Court of Justice to decide against the program following the arguments -more economic than legal- that Bundesbank has handed to them.


No Picture

Karlsruhe, ECB’s OMT or the turn of the screw

MADRID | By Luis Martí | Each time the monetary union takes a step forward, German individuals and/or civil or political groups file a case with the Constitutional Court in Karlsruhe. So far, the Court has sanctioned that German governments were correct in accepting obligations emanating from Maastricht or the Lisbon Treaty, for example, but at the same time, it has also turned the screw on the Berlin executive by setting more and more strict limits to their freedom of action, by requiring –for instance- higher levels of co-decision with the legislative organs.



No Picture

The City wants a braver Mario Draghi

LONDON | Something had to be done to support the euro. But some in the City still see the European Central Bank excessively scared of inflation. Past cash injections, though, have depreciated the common currency very little.