German ECB ruling could threaten Euro's survival, Schaeuble says

[FRANKFURT] The critical ruling by Germany's constitutional court over the European Central Bank's bond-buying programme poses a threat to the future of the common currency, according to Wolfgang Schaeuble, the country's former finance minister.

"It's very possible that the existence of the euro is now put into question in other European Union member states, because every national constitutional court can decide for itself," Mr Schaeuble, who now presides over Germany's lower house of parliament, was cited as saying in an interview with Redaktionsnetzwerk Deutschland. "This situation makes nobody happy."

Germany's constitutional court said this week that the ECB's US$2.9 trillion asset-purchase programme, which was started in 2015 and is still running, might be unconstitutional, and gave the central bank three months to prove otherwise.

In making that ruling, it accused the EU's top court of overstepping its powers when it backed the ECB policy in 2018.

Mr Schaeuble acknowledged that as finance minister he was also dissatisfied with some of the ECB's decisions, saying independent institutions without democratic legitimacy must stick strictly to their mandates. That means it's "not easy to refute" the German decision.

However, he said it's also "difficult" if the German constitutional court can't accept a decision by the EU Court of Justice.

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ECB President Christine Lagarde has a close bond with Mr Schaeuble. Her first speech as president - after she succeeded Mario Draghi - was at a ceremony to praise him.

Asked on Thursday about the German ruling, she said the central bank is "undeterred" in its mission to revive euro-area inflation, and by extension the economy, in line with its mandate.

BLOOMBERG