German court puts euro zone stimulus plan in peril

Europe’s economic stimulus plans could be in doubt.

That after Germany’s top court gave the European Central Bank three months to justify its 2-trillion euro bond buying scheme.

The purchases helped kick start the region after financial and debt crises a decade ago.

But German critics say it’s all beyond the bank’s remit, and has encouraged overspending by reckless governments.

Tuesday’s (May 5) ruling could force Germany’s central bank - the Bundesbank - to pull out of the scheme and sell more than 500 billion euros of debt that it’s bought.

German finance minister Olaf Scholz backed the ECB, for now at least:

(SOUNDBITE) (German):

”The German Constitutional Court clearly ruled that the European Central Bank's bond-buying programme is not the monetary financing of states. In that respect the programme is in line with our constitution.”

Experts are divided on the ruling’s impact.

Some say the ECB’s army of specialists will have no trouble justifying the spending.

But others warn of chaos if national courts follow Germany’s example and make their own rulings.

Expect challenges from Hungary and Poland, they warn.

The ECB governing council will hold an unscheduled meeting Tuesday to discuss the ruling.

Its separate 750-billion euro scheme to counter the virus-driven recession is not affected.

The German court said its ruling did not cover that.