there is the Bundestag verdict on QE


The clash between the ECB and the constitutional court of Germany on Quantitative Easing has come to an end.

The press rumors reported a few hours ago by Reuters have raised the veil on a document, currently not yet published, with which the Bundestag (the federal parliament) would have definitively expressed its opinion on the thorny issue.

On the ECB-Germany clash then it would also have appeared a letter sent by Finance Minister Olaf Scholz to the President of the Chamber.

ECB, Germany and QE: the news

On May 5 the judgment of the German constitutional court caused a sensation. The judges questioned Quantitative Easing and launched a real three-month ultimatum to the ECB within which to justify the program, under penalty of the Bundesbank leaving the program.

A few days ago, the central bank allowed Germany to view some confidential documents concerning its monetary policy with the aim of unlocking the thorny issue. In the last hours, however, new steps forward have been made.

According to reports from Reuters, which cited a draft document of the Bundestag, the latter would have now concluded that the ECB has met the proportionality requirements with its main stimulus program, Quantitative Easing.

In document, the conservatives of Merkel, the partners of the social democratic coalition, the liberal democratic opposition and the greens would have declared:

“The German Bundestag believes the ECB’s presentation on the implementation of a proportionality assessment and consequently is plausible fulfilled the requirements of the judgment BVerfG (constitutional court) of 5 May 2020. ”

A letter sent by the German finance minister Olaf Scholz to the president of the chamber also leaked on the clash between Germany and the ECB yesterday (still on the pages of Reuters), in which the legitimacy of QE was reiterated:

“The Federal Finance Minister is convinced that the Governing Council of the ECB … has demonstrated one likely proportionality regarding the PSPP “.

The Bundestag’s decision, if formalized, will allow the ECB-Germany clash on Quantitative Easing to be definitively closed, a clash that has led the most skeptical to fear for the future of the actions of the central institute and for the keeping of its programs of purchases in the midst of the coronavirus emergency.

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