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Chief Economist Philip Lane said the 2.7 trillion-euro ($2.9 trillion) asset-purchase program, which was started in 2015 and is still running, is “proportionate” to the economic situation -- directly tackling the central doubt of the German constitutional court. Bank of Greece Governor Yannis Stournaras said the ECB can meet the demands of the court to provide evidence if needed.
“We have many documents, lots of proof,” Stournaras said in a webinar on Tuesday. “Personally, I feel that we should try to not aggravate the situation but keep our cool.”
The court ruling reflected -- and cited -- longstanding criticism in Germany of the alleged side-effects of the ECB’s ultra-loose monetary policies, such as penalizing savers with low interest rates. It also immediately sparked a backlash.
Draghi’s successor, Christine Lagarde, said the ECB is “undeterred” -- a sign that more stimulus is likely on the way regardless of the legal spat.
The central bank cited an earlier decision by the European Court of Justice in Luxembourg to clear QE, and the ECJ itself issued a rare press release saying it “alone” can rule that an act of an EU institution is contrary to EU law. The European Commission has threatened to sue Germany.
Even former German Finance Minister Wolfgang Schaeuble, a frequent critic of QE, said the ruling could put the existence of the euro into question because it opens the door for national constitutional courts to reject EU law.