In a constitutional case that began on Tuesday, the Bundesbank chief suggested that the ECB had overstepped its mandate with its creation of outright monetary transactions (OMT). The bank believes OMTs come too close to illegal monetary financing which is forbidden under the EU regulations.
Pandora's box
The ECB’s representative at the hearing, executive board member Jörg Asmussen, told the Financial Times that a change to article 123 could ‘open a Pandora’s box, as there will surely be many wishes regarding the ECB’. He added that the ECB’s mandate was defined in the EU treaty and that the bank only carried out the wishes of elected politicians.
However, Jens Weidmann, the Bundesbank president, told the court that he was worried that the rescue plan could lead to ‘credibility problems and stability risks.’
Email your news and story ideas to: [email protected]
