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ECJ to test legality of ECB's OMT program - BTMU

FXStreet (Łódź) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ signals that the European Court of Justice will conduct a legal review of ECB's OMT program.

Key Quotes

"The European Court of Justice is scheduled to hold a hearing today on the case regarding the compatibility of the ECB’s OMT programme with the EU Treaty."

"The German Constitutional Court asked the ECJ for an expert opinion on whether or not the OMT constitutes an unlawful monetisation of government debt."

"The final ruling from the ECJ is not expected until next year. After which the case will be sent back to the German Court."

"The German Court has already indicated that if the OMT could be admissible if it were strictly limited and the ECB excluded from any debt restructuring."

"Even if the ECJ does not share the concerns already displayed by the German Constitutional Court, there is a risk that the German Court could still find fault potentially limiting Germany’s participation in the OMT."

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