Outright Monetary Transactions before the ECJ: In Search of the ‘Golden Mean’
3 Pages Posted: 27 Jan 2015
Date Written: January 15, 2015
Abstract
On 14 January 2015 – exactly one year after the German Constitutional Court (GCC) had referred for the first time in its history preliminary questions to the European Court of Justice (ECJ) – Advocate General (AG) Cruz Villalón presented his opinion in the OMT case (Case C-62/14) concerning the controversial Outright Monetary Transactions programme that the European Central Bank announced in September 2012.
In its preliminary ruling in due course the ECJ will have to find the ‘golden mean’. On the one hand, it is improbable that the European judges will risk a constitutional conflict with the highest German court by given their unqualified approval of the OMT. On the other hand, not only the unlikely rejection of the OMT in its entirety, but also the imposition of limits on the overall amount of purchases of government bonds could compromise the success of the mere announcement of the OMT in calming the markets and, moreover, provoke a resurgence of the Euro area financial and debt crisis. Arguably the dilemmas this involves are reflected in the opinion on this case by Advocate General Cruz Villalón.
Keywords: European Central Bank, Outright Monetary Transactions, Reasoned Opinion, Advocate General, C-62/14, Monetary Policy, EMU, German Federal Constitutional Court, Bundesverfassungsgericht
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