AFP, Frankfurt :
Germany’s top court will Tuesday rule on whether a key crisis fighting tool of the European Central Bank complies with its national law, kicking off a busy week for the ECB.
The following day the Frankfurt-based bank will launch a huge programme of ultra-cheap bank loans to boost prices and kickstart the sluggish eurozone economy.
And on Thursday it will be on watch as Britons vote on whether to stay in the EU or leave, a decision that could spark panic in the financial markets.
The constitutional court is set to rule at 0800 GMT Tuesday on whether the ECB’s 2012 bond-buying plan called Outright Monetary Transactions (OMT) complies with German law.
Activists charge the ECB overstepped its remit-technically as the bloc’s guardian of price stability-and assumed an economic policy role reserved for elected governments.
OMT-though never actually used-was part of ECB’s President Mario Draghi’s landmark promise to do “whatever it takes” to save the battered euro at the height of the crisis in 2012.
That vow, backed by the announcement of the OMT programme, helped reduce borrowing costs for the most debt-hit countries, calmed markets and brought the eurozone back from the brink.
The promise of OMT was that the ECB could, if necessary, buy up unlimited amounts of government bonds from debt-stricken countries that had pledged reforms such as Italy, Spain and Portugal.
Few observers expect the Constitutional Court in Karlsruhe to torpedo the ECB’s programme.
In January 2014, it had voiced concerns about OMT but then kicked the case up to the European Court of Justice in Luxembourg.
The EU’s highest court has since essentially backed OMT, arguing that while the ECB’s chief purpose is indeed price stability, it may also support EU economic policy goals.
