European Central Bank President Mario Draghi helped save the euro with his pledge to do “whatever it takes” as lenders prepared for a collapse of the currency, an ECB lawyer told a hearing today.
The European Court of Justice, the bloc’s highest court, is weighing whether Draghi’s ECB overstepped its powers in 2012 with the promise to buy the debt of stressed countries if needed. The EU tribunal’s 15-judge panel is examining the Outright Monetary Transactions program after Germany’s own top court earlier this year expressed doubts about its legality.
“The numerous cuts to key ECB interest rates made between late 2011 and July 2012 were having almost no effect on certain markets in the euro area,” Hans-Georg Kamann, a lawyer for the ECB told the EU court. “Price stability in the euro area was seriously at risk” due to “increasing fears among many market participants that the euro could collapse.”
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