German Parliament Decides on Regular Monitoring of ECB Policy

Germany’s lower house of parliament will follow the European Central Bank’s monetary policy more closely after a court ruling earlier this year catapulted legislators into the center of a spat over the bank’s bond-buying program.

The budget, finance, and European affairs committees will hold quarterly meetings to keep tabs on the ECB, according to an emailed statement from the Bundestag.

The three committees will take turns leading the sessions, which will kick off with Bundesbank President Jens Weidman commenting on ECB strategy on Sept. 16.

The decision to adopt a more regular and structured dialog on monetary policy comes after the country’s constitutional court demanded that the Bundestag review whether the ECB’s bond-buying program is “proportionate.”

As part of the top court’s May ruling questioning a more than 2 trillion-euro ($2.4 trillion) asset-purchase program, the judges said the German parliament should have challenged the ECB to show that it had considered adverse side effects, such as depressed returns on savings as well as financial instability.

The ruling triggered a debate as to whether a national court was infringing on ECB independence and seeking to override the European Union’s top tribunal, which backed the program.

After weeks of looking for a way out of the stalemate, the ECB agreed to provide the documents to German lawmakers and the federal government, allowing the Bundesbank to continue to participate in the program.

©2020 Bloomberg L.P.

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