| Author (Corporate) | BBC |
|---|---|
| Series Title | BBC News |
| Series Details | 03.06.13 |
| Publication Date | 03/06/2013 |
| Content Type | News |
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Once again the financial world and European politicians looked at Germany's Federal Constitutional Court as in June 2013 judges there examined whether the European Central Bank (ECB) was within its mandate - and EU law - in purchasing billions in state bonds. On the 11-12 June 2013, the German Constitutional court in Karlsruhe held public hearings on the legality of the European Central Bank's actions in the euro-crisis. The suit against the European Stability Mechanism (ESM), had been brought by a group of German professors, German parliamentarians and more than 37,000 citizens. Mario Draghi, the President of the European Central Bank (ECB), had earlier during a speech in the International Monetary Conference in Shanghai on 3 June 2013 defended its plan, dubbed Outright Monetary Transactions (OMTs), to allows the ECB to buy bonds of eurozone member countries to bring down their borrowing costs. "They can either reform without OMTs and retain economic sovereignty or they can reform with OMTs but give up some of their economic sovereignty," Mr Draghi was quoted as saying by the Associated Press news agency. Although the court had no formal jurisdiction over the ECB the hearings in June 2013 were closely watched as a barometer of both elite and popular German sentiment about eurozone crisis-fighting measures in the run-up to the September 2013 German federal Berlin election. At stake were two competing visions of monetary policy. One, represented by the Bundesbank, was that central banks must keep narrowly to their job of controlling inflation and ignore almost everything else, which must be left to elected politicians to deal with. The other view, as argued by key figures in the European Central Bank was that the central bank was allowed under the treaties that established it to conduct unorthodox crisis-fighting measures such as the Outright Monetary Transactions bond-buying programme. |
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| Source Link | http://www.bbc.co.uk/news/business-22749852 |
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| Subject Categories | Economic and Financial Affairs, Politics and International Relations |
| Countries / Regions | Europe |
