August 5, 2020

German Parliament supports ECB bond purchases


Berlin correspondent

Updated:

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In reaction to the critical sentence issued by the German Constitutional Court Last May, regarding the ECB’s debt purchase programs, the plenary session of the German Bundestag approved this afternoon a motion in support of the European issuer and its bond purchase policies, backed by the votes from the CDU / CSU parliamentary groups, SPD social democrats, FDP liberals The Greens, registering only the opposition of the parties of extreme right Alternative for Germany (AfD) and extreme left Die Linke. “The fact that we are voting together practically all the chamber parties, from the conservatives to the greens, in addition to social democrats and liberals, is a very clear signal to the Bundesbank, which of course will be able to continue making its purchases, but it is also a very clear signal to Karlsruhe that from the Bundestag We will continue to work on the responsibility for European integration with continued zeal and through our intense parliamentary activity. And finally, it is also a signal to Brussels, so that they know that we do not harbor the slightest doubt about the independence of the ECB and about the independence of the Bundesbank ”, celebrated CDU deputy Andreas Jung.

The argument of the German responsibility towards European integration, collected by the German constitution, has been the most used in the interventions in favor. Christian Petry of the SPD has referred to that principle as the engine, not only of this motion of support, but also of an unfinished process of fiscal integration that Europe is pending in his opinion and that the great German coalition wants to reinforce. “Let us courageously defend Europe, its open society,” he said, to continue: “Let us take this opportunity to advance in the peaceful, just and ecological Europe that we desire.” Petry has also insisted on another very repeated argument in the debate, competition to control the ECB, which does not fall on the German Constitutional Court nor on the Bundestag, but on the European Court of Justice, an affirmation that aroused outbursts of anger on the AfD benches.

“Since 2015 it is perfectly clear that the ECB is violating European sovereignty and that this zoombization of the economy can only lead to a depression,” said AfD MP Peter Boehringer, who has cited documents from Commerzbank which in turn cite reports from the ECB that speak of “risks to stability” of the European economy. «And if you don’t see it, it’s because you don’t want to see it. AfD has been presenting motions for years, taking the matter to parliamentary committees, 7 of the 10 motions in this regard have been raised by us, 6 of the 11 parliamentary questions, but it has had to be the Constitutional Court who deals with a control that you are avoiding ».

The nuance introduced by Florian Toncar, from the FPD, is that “the independence of the ECB does not mean that it can act without controls”

For his part, Fabio di Masi, a deputy for Die Linke, explained that he voted against it because his party does not accept “that the ECB can finance banks but cannot finance States”, since the speakers in favor had repeatedly emphasized that the Bond purchase programs “do not mean ECB financing of states” and are “a proportionate response” to the crisis. The nuance introduced by Florian Toncar, from the FPD, is that “the independence of the ECB does not mean that it can act without controls”, that “buying debt is not the same as moving interest rates, so we must be aware that it borders on a dangerous border “and that “A central bank is not independent to the extent that it has bought too much debt and is too exposed to a party, to a government”.

The member of the ECB Council, Yves Mersch, has stated that it considers that “after this vote, there is no obstacle for the Bundesbank to continue with its purchases” of debt. The Constitutional Court also considers the case “closed and will not rule on its own initiative on the matter, once all the answers that its judgment asked the Bundesbank have been provided, according to a spokesman. However, the institution is still legally obliged to re-examine the material received and the merits of the matter if it receives a demand in this regard and, as the AfD parliamentarians have expressed during the debate, the demands will continue to come, since this party considers that “the solvency of the Bundesabank is being put at risk and the stability of the German economy ».

Before the parliamentary session, in a charge addressed to the Bundestag, Finance Minister Olaf Scholz claimed to have examined the documents provided by the Bundesbank, provided by the ECB itself. And it concluded that the German central bank will be able to continue participating in the ECB’s asset purchase programs, adjusting to the opinion issued by the Constitutional Court and having demonstrated the proportionality of its operations. “From our point of view, the Bundesbank is allowed to continue participating in the implementation and enforcement of PSPP decisions,” he says. (…) Therefore, I intend to send the constitutional Court the documents to demonstrate that it complies with the requirement of the opinion issued in May ».

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