February 7, 2014
Germany’s top court cast doubt Friday on the legality of a key part of the European Central Bank’s rescue plan for the 18-nation eurozone, taking the rare step of asking an EU court for its opinion.
The case involves the so-called Outright Monetary Transactions program, which allows the ECB to buy bonds of ailing eurozone members as an emergency measure. Though the program has never been used, its mere existence has been credited with easing the turmoil in bond markets that was threatening the euro currency bloc.
The ECB’s offer to buy bonds has resulted in a sharp drop in the borrowing rates in countries like Spain and Italy, calming fears that the countries might default and drop out of the euro.