Germany’s Constitutional Court [official website] on Wednesday rejected [judgment, in German] a petition to block the Bundesbank [official website] from participating in the European Central Bank [official website] plan to purchase bonds.
The European Central Bank is currently purchasing 2.3 trillion euros ($2.7 trillion) worth of bonds in order to keep inflation rates at just under 2 percent. So far, the European Central Bank has already purchased 2 trillion euros worth of bonds.
The case was brought before the Constitutional Court by a group of German academics and politicians. The court’s decision to reject the plea for an injunction still leaves the case with the European Court of Justice [official website]. The petitioners claimed that a decision with the European Court of Justice would not be quick enough due to the purchasing program being almost complete. The Constitutional Court ruled against the injunctions stating that the injunction would preempt a European ruling on the case. The Constitutional Court’s judges have previously expressed that the believed the European Central Bank’s actions may be violating a ban on government financing by central banks.
The Constitutional Court previously sent [JURIST report] the case to the European Court of Justice in August. In June 2016 the Constitutional Court upheld [JURIST report] a previous unlimited bond buying program started by the European Central Bank in 2012.