- Title: ECB-EU/COURT ECB bond-buying programme was legal - EU top court
- Date: 16th June 2015
- Summary: BRUSSELS, BELGIUM (JUNE 16, 2015) (REUTERS) ECB EXECUTIVE BOARD MEMBER YVES MERSCH ARRIVING MERSCH APPROACHING JOURNALISTS CAMERAMAN (SOUNDBITE) (English) ECB EXECUTIVE BOARD MEMBER, YVES MERSCH, SAYING: "At the ECB we are quite satisfied that the Court has confirmed that we brought all the necessary diligence in order to invalidate the possible risks of being outside of o
- Embargoed: 1st July 2015 13:00
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- Location: Belgium
- Country: Belgium
- Topics: General
- Reuters ID: LVA8RZT2BS5HKF3S4P2IA6N2YE4A
- Aspect Ratio: 16:9
- Story Text: The European Central Bank won crucial backing from Europe's top court on Tuesday (June 16) for its pledge to do whatever it takes to save the euro, defeating a German group's challenge, as bloc member Greece edges dangerously close to default.
A favourable ruling had been widely expected but the European Court of Justice's judgement is a firm endorsement for the ECB, granting it leeway to take dramatic action in an emergency, albeit with some general conditions.
The case had been brought by a 35,000-strong group from Germany, including politicians and academics, who sought to dismantle the bond-buying scheme created by the ECB in 2012 but never used.
In a statement explaining its ruling, the court set out certain conditions, saying safeguards must be built in to ensure any such programme did not break rules that stop central banks from financing governments.
The European Central Bank welcomed the ruling.
"At the ECB we are quite satisfied that the Court has confirmed that we brought all the necessary diligence in order to invalidate the possible risks of being outside of our mandate," ECB executive board member Yves Mersch said.
"Not only did the Court confirm that we were erring on the side of prudence and that we are within our mandate when we designed this OMT programme, the Court furthermore also said both the objective and the means that we have used and designed are firmly within the possibilities of the Treaty," he added.
The OMT (Outright Monetary Transactions) programme was launched at the height of the euro zone debt crisis, shortly after Draghi said in a speech that the ECB would do "whatever it takes" to prevent the collapse of the currency union.
It allows the ECB to buy bonds of a euro zone country on the open market if its government has agreed a reform programme in return for euro zone funding. - Copyright Holder: REUTERS
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