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German businessmen and teachers denounce the ECB’s aid program against Covid before the Constitutional Court for financing the States

The action of the European Central Bank (ECB) has once again been the subject of a complaint before the German Constitutional Court, this time for its emergency assistance program (PEPP) against the effects of the coronavirus crisis. The complaint was received on Monday in Karlsruhe, as reported today by a TC spokesperson

The 140-page complaint is signed by a group of German businessmen and teachers captained by Berlin financial scientist Markus Kerber, an old acquaintance of the ECB, whose actions he repeatedly questions.

“The ECB acts outside the scope of its competences and the PEPP program is a flagrant case of monetary financing of governments“Keber argues, adding that this program” is a substantial expansion of the ECB’s mandate compared to existing purchase programs, such as the PSPP. ”

The PSPP bond purchase program, which was launched in 2015, aimed to avoid deflation and bring inflation in the euro zone back to its own 2% target. “With the PEPP, the monetary policy benchmark is no longer visible,” Kerber complains.

In his opinion, in addition, the program is PEPP is an economic and financial policy measure to stabilize or even rescue the euro zone, although “the ECB does not even have the mandate to keep the euro zone united.”

The PEPP is therefore the sum of “serious structural breaches by the ECB / Eurosystem “, given that the competence of economic policy rests with the Member States, says Kerber. And, above all, the ECB would go beyond the red lines marked by the Constitutional Court with its emergency program Purchases must not violate the state funding prohibition.

3.2 trillion debt

Since 2010, the ECB has acquired public debt for a volume of around 3.2 trillion euros, of which € 900 billion was spent under the PEPP. This means that, for example, the ECB has German bonds under the PEPP worth almost € 769 billion, 32.8% of the total. Italians for 551,300 million, 21.5%. 23.4% of French bonds and the 29.4% of Spaniards, about 384,800 million euros. These percentages, according to demand, make the ECB a hidden financier of European governments.

This also includes federal bonds totaling 736 billion euros and Italian bonds totaling 530 billion euros. The monetary authorities have, for example, federal bonds worth 769 billion euros and Italian debt securities for 551 billion euros. The ECB owns about a third of the German debt and a fifth of the Italian. The ECB is trapped when inflation rises, Kerber has warned.

The ECB has significantly expanded gross purchases of PEPP in the last two weeks. Some analysts maintain that only last week bonds were bought for a volume of 18.2 billion euros, compared to 16.9 billion euros the previous week.

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