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ECB’s Draghi Plan Doused by Rebellions in Germany and Greece

A delay to the highly anticipated German court decision on bail-out funding and a rebellion in the Greek government over austerity doused hopes that the European Central Bank will be able to stem the crisis after all.

by Louise Armitstead, Chief Business Correspondent

Germany’s federal constitutional court said it might be forced to delay its ruling on the legality of the European Stability Mechanism (ESM) because of an eleventh hour objection by an MP. Peter Gauweiler, a member of Angela Merkel’s ruling coalition, argued that the court ruling, due on Wednesday, should take time to assess the impact of the ECB’s “outright monetary transactions”, announced last week.

The German Chancellor’s spokesman insisted that the ECB’s plan to buy unlimited sovereign bonds from countries being supported by the bail-out funds – dubbed the Draghi Plan – should not impact the court ruling. However, the court said it would consider the request and announce its decision on Tuesday. A delay could push ratification of the fund back until next year, when countries including Spain are expected to require help imminently.

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