Boulder on the ECB, irregular Qe by Mario Draghi

The German Constitutional Court has declared the purchases of government bonds by the European central bank partially illegal. The ECB coldly replied: "We take note of this". 

The German judgment of Karlsruhe court it is a boulder that weighs on the ECB, but also on the European Court of Justice. German judges want to stem, as far as possible, the economic measures that the ECB would like to continue to implement, after having had the mandate of the EU Commission. Let's talk about the purchases of government bonds, Quantitative Easing, the famous bazooka of the ex president Mario Draghi.

Measures, considered by the German courts, not in line with the Lisbon Treaty and for which the intervention of the European Court of Justice is invoked. 

The president of the ECB Christine Lagarde he has 90 days to analyze the measures in light of the disputes, failing that the Bundesbank, as the German togates have sanctioned, will have to abandon the purchase program that Draghi had set up. 

The chancellor intervened on the whole affair Angela Merkel who spoke of an important verdict because it concerns the limits of what the ECB can do and is in contradiction with the European decision. 

QE, writes the Republic, is too distorting with respect to the choices made by governments or to market valuations, and risks rescuing decayed companies, penalizing savers, favoring debtors. Moreover, the ruling on QE also casts a long shadow over the extraordinary program for the pandemic, the 750 billion Pepp. In this regard, appeals are also foreseeable, now that Karlsruhe's expected ruling on a program that still presents many more stakes than Pepp has come out. 

The "disproportion" of QE, argue the German judges, was not recognized two years ago by the European Court of Justice. Therefore Karlsruhe argues that that verdict "is not understandable" and that it allows a national court to amend it. With that ruling, EU judges went "ultra vires" beyond their jurisdiction. But the duel is only beginning. 

The story also intervened Pierre Muscovici: You must not bandage your head and go ahead on the marked path. Then he increases the dose: "the decision of the German Court does not consider elements that meet the reasons of those who presented the challenge of the purchase program wanted by the ex governor Mario Draghi and therefore there are no immediate consequences that prevent it. What must remain now is reasonableness and calm. The ultimate goal even if still far away, says Moscovici, it is to have a stronger, more united and integrated European Union ".

Boulder on the ECB, irregular Qe by Mario Draghi