11 Jun 2013
No setback expected for the ECB on Tuesday's OMT court ruling
FXstreet.com (Barcelona) - A court hearing on the ECB bond-buying scheme, also known as the Outright Monetary Transactions, will be held starting Tuesday by Germany’s top court. The consensus is that the European Central Bank will not get any major setback on its firepower to initiate unlimited purchases of bonds from crisis-hit EU countries if ever necessary.
Bloomberg reported earlier today that "while the judges may voice serious doubts about the central bank’s plans and attach some conditions, the court won’t stop it," citing Christoph Ohler, a law professor at Jena University.
From Bloomberg: “It’s tough to say exactly how the court will handle this, but we can expect something close to the ’yes, but’ approach the judges have used before in European integration and euro-rescue operation cases,” said Ohler. “The court has never blocked anything on the European level, but in the ’strings-attached’ part unusual and surprising details can always pop up.”
In a controversial weekend article, there were some rumors brought forward by the Frankfurter Allgemeine Sonntagszeitung newspaper, speculating the ECB had set a limit of €524 billion to assist debt-hit EU countries. The ECB immediately after denied that report, saying the information was "incorrect".
During this week's court ruling, representatives of the ECB will expose their view against Bundesbank chief Jens Weidmann, who remains opposed to the idea of the OMT scheme.
Bloomberg reported earlier today that "while the judges may voice serious doubts about the central bank’s plans and attach some conditions, the court won’t stop it," citing Christoph Ohler, a law professor at Jena University.
From Bloomberg: “It’s tough to say exactly how the court will handle this, but we can expect something close to the ’yes, but’ approach the judges have used before in European integration and euro-rescue operation cases,” said Ohler. “The court has never blocked anything on the European level, but in the ’strings-attached’ part unusual and surprising details can always pop up.”
In a controversial weekend article, there were some rumors brought forward by the Frankfurter Allgemeine Sonntagszeitung newspaper, speculating the ECB had set a limit of €524 billion to assist debt-hit EU countries. The ECB immediately after denied that report, saying the information was "incorrect".
During this week's court ruling, representatives of the ECB will expose their view against Bundesbank chief Jens Weidmann, who remains opposed to the idea of the OMT scheme.