ECB official defends crisis action in German court

Germany court hears challenge to ECB's bond purchase program credited with calming crisis

Associated Press
German court weighs legality of ECB crisis measure
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An emergency phone at a bus stop is pictured near the Euro sculpture in front of the European Central Bank, ECB, in Frankfurt, Germany, Tuesday, June 11, 2013. A key ECB program that has been credited with calming the 3 1/2 year-old euro debt crisis faced a legal challenge Tuesday in Germany's highest court. The Federal Constitutional Court in Karlsruhe is considering arguments against the ECB's offer to buy government bonds and lower borrowing costs for indebted countries. Opponents of the bond-buying program say the program oversteps the ECB's mandate, which forbids it from financing governments. (AP Photo/Michael Probst)

KARLSRUHE, Germany (AP) -- A top European Central Bank official is defending the bank's key financial crisis backstop against a legal challenge in Germany's constitutional court.

Joerg Asmussen says the ECB's plan to purchase bonds issued by indebted governments helped ward off financial disaster.

He says the program — which has never been used — does not violate the EU treaty, which bans the ECB from financing governments.

The Federal Constitutional Court in Karlsruhe is considering arguments that the ECB's program is illegal and exposes taxpayers to potential losses.

Asmussen downplayed those potential losses. He said that if bonds were not repaid, the losses would first be absorbed by the central bank.

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