Italian PM Supports the ECB Against German Court

Ibeth Rivero

Italy ECBThe Italian Prime Minister Giuseppe Conte said on Wednesday that because of the independence of the Central Bank, no constitutional court can decide what the bank can do or not.

Conte was making a reference to the fact that a German top court ruled yesterday that the Bundesbank should stop buying bonds under the ECB's stimulus scheme unless it can prove that those purchases are needed and that the program is "proportional". The court also ordered the Bundesbank to sell the bonds they have already acquired under that scheme and gave the ECB three months to justify its purchases.

The German court also declared explicitly that the ECB's Public Sector Purchases Program is not only illegal but undemocratic, as it has not been approved by the German government or its parliament.

“It is not up to any constitutional court to decide what the ECB can or cannot do. Its independence is the fulcrum of the European treaties, which are recognized by Germany too,” said Conte in an interview, “I find it out of place for a national court, although a constitutional one, to ask the ECB to justify its purchases. It cannot interfere in these initiatives,” he added.

The ECB declined to comment on the decision, affirming that it took a note about it, and reiterating that its willing to do anything necessary within its mandate to ensure price stability, adding that the Court of Justice of the European Union ruled that the bank is acting within its mandate.

Conte also announced that the Italian government is launching a 55 billion euros stimulus package by the end of the week, as well as ruling out the nationalization of companies.

He also praised the Italian people's behavior after the government decided to lift up some of the restrictions it had to impose to stop the advance of the epidemic.

“This makes me hopeful that the epidemic’s curve will be kept under control,” he said.

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German Industrial Orders Slide

German industrial orders plunged in March according to data provided by the Statistics Office. Industrial orders fell by 15.6 percent, while domestic and foreign orders fell 14.8 and 16.1 percent respectively. Those are the lowest levels since 1991, making them the smallest levels ever recorded.

By 7:34 GMT the DAX index went down by 58.86 points, losing 0.55 percent and falling to the 10,670.60 level. The Euro lost ground against several currencies, falling 0.06 percent against the US dollar, losing 0.08 percent against the Pound Sterling, and dropping 0.37 percent against the Japanese Yen. On the other hand, it remained almost unchanged against the Swiss Franc.

About the Author
Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

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