Athens, July 11, 2016/ Independent Balkan News Agency
By Spiros Sideris
“Only the adoption of a form of euro bond can tackle the acute debt crisis in the Eurozone” the President of the Hellenic Republic, Prokopis Pavlopoulos, stressed during his speech today at the University of Patras where he was proclaimed Honorary Doctor of the Patras University School of Management and Business Administration.
Specifically, during his speech, the President of the Republic analyzed the limits of the European Central Bank’s intervention through its OMT bond purchase program, in the recent case law of the European Court of Justice (judgment of 16/06/2015) and the Federal Constitutional Court of Germany (Case of 06.21.2016). It is noted that the above rulings were adopted after submission – the first in its history – of a question by the Federal Constitutional Court of Germany to the European Court of Justice regarding the compatibility of the OMT bond purchase program with primary European law. Also, in this question it seems, implicitly, that the German Federal Constitutional Court supports the superiority of the German Constitution over European law.
The President initially analyzed the nature of the OMT bond purchase program, stressing that this is the method the European Central Bank conceived in the summer of 2012, when the debt crisis in the Eurozone was at its peak. In particular, through the OMT program, the European Central Bank can fight the debt crisis via the government bond purchase method in the secondary market, but for countries that have access to markets and have entered a specific and appropriate fiscal adjustment program. Prokopis Pavlopoulos, then analyyzed the limitations set by both the European Court of Justice and the German Federal Constitutional Court, in order for the OMT program to be considered compatible with primary European law, especially in regard to the powers of the European Central Bank.
It is particularly important that the President ended his speech by pointing out that under these restrictions, the OMT program will not be able, eventually, to lead to effective management of the debt crisis which is already “knocking on the door” of the Eurozone and will intensify. The conclusion Mr. Pavlopoulos drew was characteristic: “A final assessment of the future effectiveness of the OMT program, given the aforementioned case-law of the WEU and the Federal Constitutional Court of Germany, lead to the following ominous finding: The limited in any case range of OMT – which is far from being a program which is even a rudimentary form of Eurobonds which seems increasingly necessary to defend the euro zone ahead of emerging major challenges which threaten it – together with the above severe restriction to its application, undermine the outset and its usefulness in view of the current and future debt crisis situation. To put it simply, it is clear for all to see that it is unrealistic to expect that, in this form, the OMT program is in a position to effectively address the existing -and constantly expanding- debt crisis within the euro zone and its multiple negative implications. “