Germany's Constitutional Court has rejected a challenge of the European Central Bank's emergency bond-buying scheme, clearing a never-used crisis fighting tool. David Pollard reports.
If it felt like a death sentence was coming, in the event, it was anything but. The ECB's emergency bond-buying scheme cleared by Germany's Constitutional Court. And not surprisingly, say economists - as no crime had actually been committed. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "There was a realistic recognition that the ECB is acting within the letter of the law and it's doing its best to keep the euro zone afloat, and I think there's also a recognition that if the euro zone does run into problems, it will cause issues for Germany too, so I think there's also a bit of economic self-interest at work here." A relief for German share traders then ... Even if a group of 35,000 Germans, including politicians and academics, had wanted to lock it up and throw away the key - asking the court to dismantle it. The Outright Monetary Transactions scheme to buy the bonds of financially strained euro zone members in their eyes, illegal. OMT hasn't been used yet - most hope it won't need to be. But a ruling against it could have knocked confidence in the ECB's powers to boost the euro zone. When it may already be struggling to push through its 1.74 trillion euros QE asset purchase programme. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "It's increasingly difficult for the ECB to find the bonds it needs to buy, so I think there is a sense that liquidity is drying up particularly with regard to the ECB's activities." The court did impose some minor limits on the Bundesbank's participation in the scheme. Those, though, thought to be in line with a similar ruling by the European Court of Justice last summer.