Report

The ECB's OMT Programme and German Constitutional Concerns

How should the ECB’s programme be evaluated? Is the ECB acting beyond its mandate? Are the potential fiscal consequences of the OMT programme a releva

Publishing date
28 August 2013

In June 2013, the German constitutional court (Karlsruhe) debated the legality of the European Stability Mechanism (ESM) and the European Central Bank (ECB)’s Outright Monetary Transaction (OMT) programme. After the court had preliminarily approved the ESM in September of last year, Karlsruhe is now evaluating the scope and boundaries of the ECB’s monetary policy mandate and the OMT programme and its consequences on the budget right of the Bundestag. While it is very unlikely, the court,in theory, could force the German government to bring the ECB to the European Court of Justice or, even more dramatically, it could request Germany to leave the eurozone as the former constitutional court judge, Udo di Fabio argued in a recent study.

So how should the ECB’s programme be evaluated? Is the ECB acting beyond its mandate? Are the potential fiscal consequences of the OMT programme a relevant dimension for the constitutionality of the OMT programme? Or is the OMT programme without fiscal consequences?

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