Germany's Constitutional Court has ruled that the country's central bank must stop participating in a key European Central Bank stimulus program but gave the ECB time to demonstrate that the stimulus program is needed and appropriate.
The judges of the Karlsruhe-based court ruled Tuesday that Germany's central bank, the Bundesbank, must stop buying bonds as part of an ECB stimulus program begun in 2015 unless the ECB reaches a new decision on the programme that demonstrates its effects on the economy were proportionate."
The court said that the Bundesbank is barred, after a transitional period of at most three months, from participating in the implementation and carrying out of the decisions at issue, unless the ECB council demonstrates in a new decision that the goals sought by the purchase program are not disproportionate to their economic and budgetary effects."