Top German Court Finds Some ECB Actions Unconstitutional

The lawsuit was filed by a group of businessmen and academics who are frequent critics of the EU. They argued that the ECB is improperly conducting economic policy instead of simply setting monetary policy.

" The court ruled that Bundesbank will not be allowed to participate in the ECB's QE, called Public Sector Purchase Programme (PSPP), within the next three months "unless the ECB Governing Council adopts a new decision that demonstrates...the PSPP is not disproportionate to the economic and fiscal policy effects."

"The economic policy effects of the PSPP furthermore include its economic and social impact on virtually all citizens, who are at least indirectly affected, inter alia as shareholders, tenants, real estate owners, savers or insurance policy holders. For instance, there are considerable losses for private savings (ed. note - Pension plans that mandate % of bond holdingsare in shambles globally, esp. Government employee plans). Moreover, as the PSPP lowers general interest rates, it allows economically unviable companies to stay on the market. Finally, the longer the programme continues and the more its total volume increases, the greater the risk that the Eurosystem becomes dependent on Member State politics as it can no longer simply terminate and undo the programme without jeopardising the stability of the monetary union," 

The courted added: "On the same condition, the Bundesbank must ensure that the bonds already purchased and held in its portfolio are sold based on a — possibly long-term — strategy co-ordinated with the Eurosystem." However, the court also said their decision did not apply to the ECB's latest 750 billion euro pandemic-fighting virus stimulus program to support the regional economy. "

 So, what is the work around?

The current crisis oriented monetizations are acceptable. So, the solution is to go from crisis to crisis.  A permanent state of crisis will allow the ECB to monetize more debt in Germany. Another extreme virus might do it.

We're looking to September/November (and US Presidential election) for the (cough, cough) Reinfection.

Sorry to see the never-ending snipe hunt for 'inflation' won't work any more.

Also what did I say???

The two rules of the EU are

1) Never use real money when printed or borrowed money is available
2) Germany always sticks someone else with the bill.

 How's that gonna work? This sorta feels like "they've made their ruling, now let them enforce it". What's Germany going to do, leave the EU?