- Mario Draghi, ECB Governor
The European Court of Justice gave a non-biding opinion that the ECB's OMT programme is legal and compatible with the European law, despite the fact that the scheme's legitimacy was questioned by German economists and politicians. They claimed the central bank overstepped its authority and violated a European Union treaty ban on the ECB directly providing help to governments. The Outright Monetary Transactions was designed by the ECB Governor Mario Draghi in 2012 in order to save the Euro, but has never been implemented, partly due to legal objections expressed by German experts. The opinion from Pedro Cruz Villalon, an advocate general with the European Court of Justice, is preliminary before the court's judges come to a decision later this year. The court does not have to necessarily follow his opinion. Nevertheless, it might also ease resistance to a similar programme that could be announced by the ECB Governor Mario Draghi as soon as January 22.
Just hours before the court's announcement, Mario Draghi reiterated the central bank's determination to step up further stimulus to reach price stability in the Euro bloc. To boost prices, the ECB "has to keep interest rates low and work toward an expansive monetary policy," Draghi said. ECB policy makers have recently expressed their views on QE, warning about deflationary threat in case the central bank does not act in a timely manner.
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