German newspaper Bild said today that the European Central Bank and the Bundesbank have in-house lawyers checking on the legality of the ECB's new bond-buying program. They are investigating both what proportions the program would have to take on and how long it would have to last for it to breach EU treaties, in order to prepare in case the matter is referred to the European Court of Justice.
The bond-buying plan is intended to lower the borrowing costs of eurozone nations such as Spain and Italy. But the program has stirred anxiety in Germany, where some people accuse the ECB of reaching beyond its mandate and potentially exposing taxpayers to billions of euros in risky debt.
ECB President Mario Draghi said earlier this month that the central bank was ready to purchase unlimited amounts of bonds issued by eurozone member states, provided they made a formal request for aid and adhered to strict domestic policy conditions. Jens Weidmann, the Bundesbank chief, was the only dissenting voice in the ECB's decision.
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