Statement on the recommendation of the ECJ advocate general Cruz Villalón on bond purchasing of the ECB
The recommendation of the advocate general of the ECJ is an overwhelming success for the European Central Bank (ECB). Such a strong and overwhelming support for the ECB is surprising and could not have been expected. The decision finds the OMT program to constitute a legal instrument of monetary policy that pursues a legitimate objective. The recommendation is in clear contradiction to the decision of the German constitutional court, and indirectly asks all courts to restrain from intervening further. The recommendation gives the ECB substantial freedom to design and conduct monetary policy. I expect this recommendation to strengthen the position of the ECB and make a new ECB purchase program of government debt more likely.