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German Eurosceptic readies lawsuit even before ECB bond-buying decision
January 22, 2015 / 12:41 PM / 3 years ago

German Eurosceptic readies lawsuit even before ECB bond-buying decision

BERLIN, Jan 22 (Reuters) - A German lawyer who has been prominent in attempts to halt euro zone bailouts said he was already preparing a legal complaint anticipating that the ECB will announce a government bond-buying programme on Thursday.

Peter Gauweiler, a conservative Bavarian politician and lawyer, said he had instructed his legal team to “closely analyse today’s decision by the European Central Bank council and pre-emptively prepare a complaint” with Germany’s Constitutional Court.

“If the ECB council decides today that the ECB will buy hundreds of billions of euros of state bonds, that will involve the common liability of state debt,” he said in a statement.

Some German opponents to European Central Bank chief Mario Draghi’s widely-anticipated plan for quantitative easing argue that taking on liability for other states’ debt violates the German constitution. The German government’s main objection is that it removes the incentive for more debt-burdened countries to overhaul their finances.

The ECB won crucial backing last week for Draghi’s pledge to do “whatever it takes” to support the euro when a top European Union legal adviser removed a hurdle to the bank’s QE plans.

That was a clear rebuff to a suit brought by Gauweiler and other Eurosceptics before Germany’s Constitutional Court in Karlsruhe, which last year referred the case to the European Court -- while reserving the right to give its own final ruling.

Germany is the largest economy in the 19-state euro zone. Its influential Bundesbank, as well as some prominent economists and conservative supporters of Chancellor Angela Merkel, say QE would give euro zone states cheap credit and let them off the hook when it comes to painful but necessary economic reforms. (Reporting by Stephen Brown and Madeline Chambers; Writing by Stephen Brown; Editing by Ruth Pitchford)

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