EU Says ECB Didn’t Order Spain Constitution Change for Bond Buys

The European Central Bank didn’t tell Spain to change its constitution in exchange for bond purchases by the central bank in August last year, the European Union’s ombudsman said.

Nikiforos Diamandouros, who investigates complaints about EU institutions, responded to a request from a Spanish lawyer for access to a letter the ECB sent then Prime Minister Jose Luis Rodriguez Zapatero as the central bank started buying Spanish bonds. Diamandouros backed the ECB’s refusal to publish the letter and said it contained no call for a constitutional amendment, the EU said in a statement today.

A month after the ECB started propping up Spain’s bond market to bring down yields, Zapatero changed the constitution for only the second time since it was adopted 30 years earlier to enshrine budget discipline in the charter. The amendment prompted street protests and a rebellion within Zapatero’s Socialist Party, while 29 lawmakers boycotted the vote in Parliament.

Neither the former government nor Prime Minister Mariano Rajoy, who backed the amendment, have ever commented on the contents of the letter.

To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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