Top German court asks ECB to justify bond buying

BERLIN

Germany's constitutional court on Tuesday ruled that the country's central bank, Bundesbank, must stop buying bonds under European Central Bank's (ECB) long-running stimulus program.

The court also gave the ECB three months to fix its quantitative easing program.

Since 2015, the ECB has been criticized by the German court for its controversial €2-trillion ($2.17-trillion) public sector purchase program, aimed at keeping the euro zone economy afloat.

With the court ruling, the Bundesbank is to stop buying government bonds unless the ECB can prove the purchases are proportionate.

The ECB can continue its bond purchases, but will have to legitimize its policies within three months.

The verdict did not apply to the ECB’s pandemic-fighting program, a €750-billion ($813-billion) scheme approved last month to back up the euro area economy.

The ECB has long been dependent on quantitative easing to shore up the euro area economy.

As many European countries are now in lockdown to stop the virus from spreading, the ECB plans to print another trillion euros to cushion the negative impacts of coronavirus on governments and companies.

*Writing and contributions by Aysu Bicer in Ankara