Reuters: Top European court throws weight behind ECB in fighting crises
16 June 2015
The European Central Bank won crucial backing from Europe's top court for its pledge to do whatever it takes to save the euro, defeating a German group's challenge.
A favorable ruling had been widely expected but the European Court of Justice's judgment is a firm endorsement for the ECB, granting it leeway to take dramatic action in an emergency, albeit with some general conditions.
In a statement explaining its ruling, the court set out certain conditions, saying safeguards must be built in to ensure any such program did not break rules that stop central banks from financing governments.
Experts said the decision would strengthen ECB President Mario Draghi hand in managing emergencies such as a possible departure of Greece from the euro zone.
The OMT (Outright Monetary Transactions) program was launched at the height of the euro zone debt crisis, shortly after Draghi said in a speech that the ECB would do "whatever it takes" to prevent the collapse of the currency union.
It allows the ECB to buy bonds of a euro zone country on the open market if its government has agreed a reform program in return for euro zone funding.
© Reuters
