ECB, ESM Challenge Schedule at German Top Court Unclear

Germany’s top constitutional court hasn’t decided how to proceed on challenges to the nation’s role in the European Stability Mechanism or the European Central Bank’s bond-buying announcement.

While the suits are on a list of disputes the Federal Constitutional Court intends to decide this year, no hearing has been yet been scheduled, Chief Justice Andreas Vosskuhle told reporters at a press reception in Karlsruhe yesterday.

“This is quite a big tale,” Vosskuhle said. “We’ll have to see how to handle it, that’s not quite clear yet.”

In a preliminary ruling in September, the court cleared the way for the permanent euro-area rescue fund and the European Union’s fiscal pact, rejecting bids to halt German ratification of the 500 billion-euro ($663 billion) backstop, while imposing some conditions on its use. Under the court’s procedural laws, the judges still have to render a final ruling over the issues.

Plaintiffs have since added more challenges against the ECB’s Outright Monetary Transactions program aimed at buying government bonds if necessary. A week before the September ruling, ECB President Mario Draghi announced the central bank was ready to buy unlimited quantities of short-dated government bonds of nations signed up to rescues from the ESM or European Financial Stability Facility.

While rejecting a last-minute request for an emergency injunction over the Draghi announcement, the court said at the time it would review a challenge to the ECB bond-buying programs during additional hearings in the cases.

The cases are BVerfG, 2 BvR 1390/12 et al.

-- Editors: Christopher Scinta, Peter Chapman

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