German court weighs legality of ECB crisis measure

Top European financial officials testified today for and against a European Central Bank program that has been instrumental in calming the euro debt crisis as it faced a legal challenge in Germany's highest court.
The Federal Constitutional Court in Karlsruhe is considering arguments against the ECB's program, which has been credited with easing turmoil in bond markets in the 17-country eurozone but which some say oversteps the ECB's mandate.
The hearing showed how the ECB's actions were splitting Germany's financial heavyweights in two camps.
German Finance Minister Wolfgang Schaeuble bluntly told the court it had no authority to rule on the program and highlighted how the ECB had saved the euro currency bloc from potential disaster.

But the president of Germany's influential central bank, Jens Weidmann, warned that the ECB's actions were threatening the independence of its own monetary policy.
The program, known as Outright Monetary Transactions, or OMTs, is an offer by the ECB to buy the government bonds of a country in need of financial help. The purchases would help by lowering the country's borrowing costs in the bond markets.

The program was launched in September after ECB President Mario Draghi dramatically vowed in July to "do whatever it takes" to save Europe's common euro currency.
The ECB hasn't bought any bonds yet. But the program's mere existence has helped lower countries' borrowing costs in bond markets dramatically, easing fears the eurozone might break apart. To take part in the scheme, a country would have to commit to reduce its debts and deficits, as well as accept a bailout loan or credit line from the European Union's financial rescue fund, the European Stability Mechanism.

EU efforts to rescue financially troubled countries have run into popular opposition in countries like Germany, the Netherlands and Finland, which have been net contributors to the eurozone's financial rescue programs.
In Germany, opponents of the bond-buying program say it oversteps the ECB's mandate, which forbids it from financing governments.