Rehn: ECB still has “big bazooka” to defend euro

The European Commissioner is not worried for German doubts on OMT bond-buying plan’s legitimacy

The European Central Bank still has a “big bazooka” with plenty of ammunitions to defend euro, despite the German Constitutional Court’s decision to refer a complaint to the European Court of Justice, against the ECB’s OMT plan (Outright Monetary Transactions policy): the German Court believed the plan violated the ECB’s mandate and would constitute illegal monetary financing of governments.

Speaking at a Reuters summit on the euro zone, the European Commissioner for Economic and Monetary Affairs also said ““I find it is both appropriate and fundamentally legitimate that the European Court of Justice scrutinies and finally rules on the competences of another European institution”.

In the meantime, the Finnish Commissioner asked the ECB to act on the level of inflation in the euro zone, which for the moment is 0.8 per cent – quite far from the self-set inflation target of the ECB, which is close to but below 2 per cent.

“In my view the ECB certainly has its big bazooka and plenty of ammunition for the bazooka if needed,” said Commissioner Rehn when asked about the ECB weapons for helping troubled Member States.