Germany’s constitutional court is hearing evidence before deciding if the European Central Bank’s bond-buying programme violates German law.
They are questioning Finance Minister Wolfgang Schäuble, Bundesbank head Jens Weidmann and others, following complaints that it is an illegal scheme to fund eurozone members through the back door.
Giving evidence Schäuble defended the scheme and questioned whether the country’s top court had the power to rule on it: “I find it hard to imagine that German courts would decide directly on the legality of the ECB’s actions.”
If they did so, he said, there was a risk that courts in all 17 eurozone member states would try to weigh in, giving the ECB contradictory legal orders.
“The German government sees no signs that the measures taken by the ECB so far violate its mandate,” Schaeuble added.
Opening proceedings, the court’s president Andreas Vosskuhle said: “We will clarify whether the European Central Bank is doing something which it has not been given the rights to do, and which it cannot be given the rights to do under the rules of the constitution, and whether a constitutional complaint about that can be pursued by citizens.”
The ECB’s bond buying programme calmed investors by easing fears the eurozone was going to break up.
The Bank has not actually had to buy any bonds, just to say that it would if there was a risk of a country – such as Spain or Italy – defaulting.
Almost 37,000 Germans complained about the programme, including the Left Party, the More Democracy movement, and a group of eurosceptic academics.
They argued the ECB has gone beyond its mandate by financing the deficits of essentially bankrupt states.
The judges are not expected to reach a final ruling until after German parliamentary elections in September.
However Schaeuble’s comments raised the prospect of the case being referred to the European Court of Justice in Luxembourg.