Today the German constitutional court will gather to begin considering a case against the European Central Bank’s Outright Monetary Transactions programme, introduced last year.
As yet the programme remains untested, but if it were used potentially unlimited purchases of the bonds of debt-stricken Eurozone nations could be made.
Plaintiffs have brought a case against the scheme, but ECB President Mario Draghi is confident in the fairness of the review.
During an interview Draghi asserted: ‘I have full confidence in the constitutional court’s independence, also in its ability to examine with thoroughness and with fairness all the advice it is getting from all sides. It would be presumptuous of me to say what the conclusion could be.’
Indebted nations would only be considered eligible for the scheme if they adhered to strict adjustment programmes. To this end Draghi added: ‘If you look back to a year ago, there has been significant progress in these countries. It is probably the most successful monetary policy measure that has been taken.
Jens Weidmann, President of the German central bank has made his opposition to the scheme clear, arguing that it is too much like the ECB financing governments. He will give his testimony during the OMT review, but ECB Executive Board member Joerg Asmussen will also offer an opposing view during the proceedings.
Eurozone news to look out for in the days ahead includes tomorrow’s German CPI figures and Thursday’s publication of minutes from the European Central Bank’s latest policy meeting.
Euro (EUR) Exchange Rates As of 08:45 –
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3262 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8515 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4172 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6841 >