ECB Faces Three Suits Over Quantitative Easing in Germanyby
Cases targeting ECB's asset purchases and Germany's role
Third action was filed late October at Constitutional Court
German politicians who failed in previous attempts to have courts derail European Union policy filed lawsuits at the country’s top court challenging the European Central Bank’s 1.1 trillion-euro ($1.2 trillion) asset-purchase program.
Three suits were filed over the last six months, according to Michael Allmendinger, a spokesman for the Federal Constitutional Court in Karlsruhe. Bernd Lucke, the head of political party ALFA, brought a case in September. Ex-lawmaker Peter Gauweiler said in an e-mailed statement that he also filed a complaint last month.
"With its euphemistically so-called Quantitative Easing policy, the ECB is seeking to inflame inflation by printing huge amounts of money," said Gauweiler, who was behind a case that resulted in a ruling from the EU’s top court earlier this year. "This program is economic policy and first and foremost serves private banks from which the ECB purchases problematic loans. It is turning itself into the bad bank of Europe."
Nine months into the bond-buying program, the main goal of spurring inflation toward the ECB’s goal of close to but below 2 percent remains elusive with price increases still largely absent from the 19-nation euro region. With the economy at risk of cooling amid weaker growth in China and a slowdown in global trade, ECB President Mario Draghi has held out the prospect of more stimulus next month, when new consumer-price and growth forecasts will be published.
German Finance Ministry spokeswoman Maike Kreutzberg said she can’t immediately comment on the lawsuits. The ECB’s press office declined to comment.
The cases are separate from a complaint attacking the ECB’s 2012 Outright Monetary Transactions program. That action was dealt a setback when the EU’s highest tribunal in June largely approved the OMT. The German judges still have to make a final ruling in that litigation.
In his new suit, Gauweiler argues that Draghi may have been biased and shouldn’t have participated in decisions potentially affecting the refinancing efforts by Italy or Greece. Draghi used to work for the Italian finance ministry, so there are "serious indications" he may have have been in part responsible for the countries’ high level of debt and "financial manipulations" allowing Italy to enter the euro zone, said Gauweiler.
"Later, he was at Goldman Sachs Group Inc., the bank that helped Greece veiling its deficits and fraudulently become a member of the euro zone,” Gauweiler wrote.
Lucke’s ALFA party had announced in September that he and two other members of the European parliament have filed the suit together with 1,600 citizens.
The cases are BVerfG, 2 BvR 859/15, 2 BvR 1651/15 and 2 BvR 2006/15.