The European Central Bank said it “remains fully committed to doing everything necessary” to pursue its inflation target after German judges challenged the legality of its bond-buying policy.
The ECB said in a statement today that its main governing body was briefed on the case by its legal department as well as by the head of the German central bank. Earlier in the day, Germany’s top court ruled that the ECB needed to further justify its asset-purchase program of 2015.
The Constitutional Court in Karlsruhe also ruled that EU judges, in an earlier decision related to the case, had failed to consider the economic policy effects of the ECB program.
The bond buying, also referred to as “quantitative easing,” was designed to stimulate economic growth and spur inflation — which for years has fallen well short of the ECB’s target of slightly less than 2 percent. The eurozone central bank has since topped up its 2015 actions with the €750 billion Pandemic Emergency Purchase Program, seeking to cushion the impact of the coronavirus outbreak.
The ECB said its “Governing Council remains fully committed to doing everything necessary within its mandate to ensure that inflation rises to levels consistent with its medium-term aim and that the monetary policy action taken in pursuit of the objective of maintaining price stability is transmitted to all parts of the economy and to all jurisdictions of the euro area.”