ZEW President Clemens Fuest - Argumentation of ECJ Advocate General in ECB Case Is Not Convincing

The president of the Centre for European Economic Research (ZEW), Professor Clemens Fuest, is not convinced by the arguments that Pedro Cruz Villalon, advocate general to the European Court of Justice (ECJ), put forward in a legal opinion to reject the German Federal Constitutional Court's criticism of the Outright Monetary Transactions (OMT) programme.

"Of course there is a risk of insolvency for countries whose government bonds are bought by the ECB under the OMT programme. The ECJ advocate general's legal opinion is non-binding. It is no carte blanche for the ECB to activate the OMT programme, even if the ECJ should finally come to the same conclusion.

While the advocate general has indeed called for conditions for the bond-buying programme, they are considerably less restrictive than those demanded by the Karlsruhe Federal Constitutional Court. In such a situation, the Constitutional Court would either have to rule Germany's participation in future European Stability Mechanism (ESM) programmes unconstitutional, or revise its previous position."