German Verdict

ECB’s Crisis Actions Cleared

Germany's high court has formally acknowledged that it needs to respect European court rulings for the first time.
  • Why it matters

    Why it matters

    The high court decision ends concerns of financial markets that the ECB’s 2012 backstop for the euro zone could be toppled by the judiciary.

  • Facts


    • In September 2012, the ECB promised to buy unlimited government bonds of any euro-zone country plunged into crisis, thwarting speculators that were betting on a euro-zone collapse.
    • Germany’s top court on Tuesday said it would respect an earlier ruling by the European Court of Justice, which upheld the ECB’s rescue plan in 2015.
    • The rescue plan is separate from the ECB’s ongoing “quantitative easing” plan, a €1.5-trillion program to buy up the bonds of all euro zone nations to push down interest rates and raise inflation.
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Mario Draghi’s most famous line, “whatever it takes,” has finally been declared legal.

Germany’s top court on Tuesday upheld the European Central Bank’s 2012 rescue plan for the 19-nation euro zone, ending one of the longest-running court cases against the ECB and staving off a possible constitutional crisis in the European Union.

“With today’s decision, a long and laborious case comes to an end,” Andreas Vosskuhle, who presided over the case at Germany’s Federal Constitutional Court in Karlsruhe, said in announcing the much-anticipated decision.

While Germany’s top court said it had “reservations” about the ECB’s actions, Mr. Vosskuhle said it would respect the ruling of the European Court of Justice, which upheld the central bank’s program last year.

It marks the first time that a top German court has said it will abide by a higher European court’s decision.

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