Conflict over bond purchases: French central bank expects agreement

ECB, about dts
ECB, about dts
French central bank chief François Villeroy de Galhau sees good chances of resolving the conflict over the ECB's bond purchases with the Federal Constitutional Court.

"There is now a good chance that a solution is close to responding to Karlsruhe," he told the "Handelsblatt" (Monday edition). In fact, the central bank's decisions are "obviously proportionate" and the European Court of Justice has confirmed this.

The Governing Council last week released documents for the Federal Government and the Bundestag that are intended to demonstrate the proportionality of the purchases. In view of the economic burdens caused by the corona crisis, Villeroy considers it normal in the short term that the European states support the economy and their public debt increases. "However, the euro countries should reduce their debts in due course." The procedure could vary from country to country. In France, it will also be about better controlling spending. “We have to use public funds more efficiently, as Germany did before. It will be important that a medium-term debt reduction policy is clearly communicated and represented. ” Regarding the duration of the ECB's bond purchase program in the corona crisis, known as PEPP, Villeroy said: "We could clarify the criteria regarding the economic situation (" state dependent "), upon which we stop the program."



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