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German parliament wants quarterly meetings with Bundesbank chief

Published 19/06/2020, 12:05
© Reuters. FILE PHOTO: Outbreak of the coronavirus disease (COVID-19) in Frankfurt

BERLIN (Reuters) - The German parliament's finance committee has agreed to invite the Bundesbank chief and a European Central Bank board member to a July meeting to discuss a ruling by Germany's top court on ECB stimulus, a committee document seen by Reuters showed on Friday.

In addition to the July video conference meeting, the committee also wants to invite the Bundesbank, one of the 19 national central banks that make up the ECB, to a quarterly dialogue, minutes of a June 18 committee meeting showed.

The development comes after Germany's highest court last month gave the ECB three months to justify bond purchases under the flagship stimulus programme it introduced in 2015 or lose the Bundesbank as a participant.

In its ruling, the court also called on the German parliament and government to challenge the ECB on the matter.

The May 5 ruling has posed a conundrum for Berlin, which is bound to respect the Karlsruhe court but at the same time does not want to erode the independence of the ECB, whose unprecedented stimulus has kept the euro zone intact.

The committee minutes confirm a story in Der Spiegel magazine, which reported that by setting up the quarterly 'monetary dialogue' with the Bundesbank, parliament wanted to meet the court's call to ensure more transparency on ECB policy.

"We want to fulfil this duty," conservative lawmaker Hans Michelbach, the committee's chairman, told Der Spiegel.

The Karlsruhe court said the Bundesbank could no longer be part of the bond-buying plan unless the ECB can show its bond purchases "are not disproportionate to the economic and fiscal policy effects", the judges said.

© Reuters. FILE PHOTO: Outbreak of the coronavirus disease (COVID-19) in Frankfurt

The bond-buying programme kept the euro zone in one piece during the sovereign debt crisis but critics argue it has flooded markets with cheap money and encouraged over-spending by some governments.

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