14 October 2014

Bloomberg: Draghi’s ‘whatever it takes’ plan faces trial at EU court

European Central Bank President Mario Draghi’s pledge to do “whatever it takes” with a bond-buying plan to save the euro-area went on trial before the European Union’s top judges on Tuesday.

The Court of Justice, the bloc’s highest court, will weigh whether Draghi’s ECB overstepped its powers in 2012 with the mechanism to buy the debt of stressed countries if needed. While Germany’s own top court earlier this year expressed doubts about the plan’s legality, the EU tribunal’s 15-judge panel is unlikely to overturn it, according to legal scholars.

“A ruling that would say the ECB’s Outright Monetary Transactions mechanism isn’t in line with the EU Treaty would be the end of the euro,” said Pierre-Henri Conac, a professor of financial-markets law at the University of Luxembourg. “Politically, they cannot do that. There is no real suspense about the way the ruling will go, but there will be suspense about the actual content of the decision.”

Full article on Bloomberg

Financial Times: EU’s top court begins legality test of bond-buying plan

The EU’s top court will began a potentially explosive legal review on Tuesday of the European Central Bank’s bond-buying plan that may ultimately determine whether the scheme credited with ending the eurozone’s sovereign debt crisis could ever be used.

The European Court of Justice is not expected to give a final ruling on the legality of the bond-buying programme – known as Outright Monetary Transactions – until summer 2015. But today’s hearing could give an early sense of how the judges will handle the arguments in the case. It is also a reminder of the increasingly hostile sentiment in Germany towards the ECB’s exceptional measures for tackling the eurozone crisis.

Full article on Financial Times (subscription required)

© Bloomberg