PARIS (Reuters) – The European Central Bank aims to fully deliver on its mandate as interpreted by the European Union’s highest court, ECB policymaker Francois Villeroy de Galhau said on Wednesday.
Germany’s constitutional court on Tuesday gave the ECB three months to justify bond purchases under its flagship economic stimulus programme or lose the Bundesbank as a participant.
“As the Court of Justice of the European Union has said, our past actions are indeed proportionate to our mandate, and our determination for the future to deliver on that mandate is total,” Villeroy told lawmakers in France’s lower house of parliament.
The German court’s verdict dealt a blow to the ECB’s unprecedented 2 trillion euro asset purchase scheme that helped keep the euro area from breaking up during its debt crisis but which critics say has flooded markets with cheap money and encouraged some governments to overspend.
A German lawmaker said on Wednesday after the ruling that German parliamentarians should be involved in closer supervision of the ECB, whose independence is enshrined in the EU treaties that created the shared central bank.
Villeroy, who is also head of France’s central bank, batted aside criticism of the ECB’s independence and focus on price stability, which he said in no way reduced its effectiveness.
“In the very name of our mandate, we will be able to go further, and we will most likely have to go further, and thus support the recovery through low interest rates and abundant liquidity for a long time,” he said.
(Reporting by Leigh Thomas; Editing by Giles Elgood)
