the European Central Bank (ECB) intends to force Germany to save the European economy by buying government bonds of different Eurozone countries. In an interview with four German publications, including Der Spiegel, said the head of the ECB, Christine Lagarde.
According to her, the Bundesbank — the German Central Bank — is obliged to participate in the General program of quantitative easing (QE) and was unable to make objections, even though the decision of the German national courts.
In early may the German constitutional court banned the Bundesbank to participate in the QE program for at least the next three months as long as the ECB does not provide evidence of its validity and safety for Europe’s economy.
the Judges felt that launched in 2015, the QE program aimed to eliminate the consequences of the European debt crisis and is designed for 2.7 trillion euros, has a lot of side effects. In particular, it affects the level of inflation and worsens the banks ‘ balance sheets, the regulators selling government bonds. The result can hurt their investors, the court decided. The same effect can have the current programme for the purchase of 750 billion euros on the secondary market.
According to Lagarde, the judgment has no legal force, and the Bundesbank should not obey him because, by its Charter, is independent and subject only to the policy of the ECB. All national Central banks are the shareholders of the General control, and the share of household spending represents the biggest package of 26 percent.
