Suit against ECB fails in court

The European Central Bank avoided a legal challenge to its purchase of euro-area government debt and acceptance of Greek, Irish and Portuguese debt from banks as collateral after the bloc’s top court threw out the case.

A lower European Union court was right to reject the challenge by Stefan Staedter in Berlin as “manifestly inadmissible” because it was filed more than two months after the start of the ECB’s bond-buying program and decisions to accept collateral, the EU Court of Justice in Luxembourg said in a ruling published on its website. Staedter, a lawyer working for German-based campaign group Europolis, had brought the case. Europolis is headed by academic Markus C Kerber who last year asked Germany’s constitutional court to block the country’s participation in the EU bailout of Portugal.

“It’s a poor decision,” said Kerber in a phone interview today. The decision, dated Nov. 15 “is not conclusive” and “it’s inconsistent with the criteria for admissibility,” he said. “We couldn’t know when these bond purchases were made by the ECB, because since 2010 they were made with irregular intervals.” Kerber is involved in a pending lawsuit at the EU’s top court in which a group including more than 7,000 plaintiffs is suing the Frankfurt-based ECB over its proposal to buy unlimited bonds from debt-laden countries to regain control of interest rates in nations that make up the monetary union.