[JURIST] EU Advocate General Cruz Villalon on Wednesday gave legal support [press release, PDF] to the European Central Bank (ECB) plan to purchase government bonds as an attempt to remedy the financial crisis in the Eurozone. The Outright Monetary Transactions program sets economic standards for selecting which states qualify for government bond purchases. The legal legitimacy of the program and its compatibility with EU treaties are being challenged [JURIST report] in the European Court of Justice (ECJ) [official website] by the German government following their citizens’ call to action. The advocate general’s opinion is limited to addressing the legal concerns raised by the September 6, 2012, press release announcing the program, but at this time he supports the legality of the proposal. This opinion is subject to change depending on how the program is actually implemented. The opinion is not binding on the court, and a decision will be rendered following deliberation by the judges.
This is the latest development in the ongoing struggle to establish financial stability in the EU. In September the EU parliament approved [JURIST report] a new bank supervisory mechanism. Last November the ECJ ruled [JURIST report] that the Eurozone’s permanent bailout fund, the European Stability Mechanism, is in line with European law. The ruling came following several member states’ own courts finding the ESM constitutional under their own laws, including Estonia and Germany [JURIST reports]. Last June the European Commission [official website] announced [JURIST report] a proposal that would address the problems of bailing out large banks with public funds during financial crises in the future.