European Central Bank Governor Mario Draghi waits for the start of a meeting of the Economic and Monetary Affairs Committee at the European Parliament in Brussels on Monday, June 15, 2015. (AP Photo/Virginia Mayo) (The Associated Press)
FRANKFURT, Germany – The European Court of Justice is getting ready to hand down a decision Tuesday on whether the European Central Bank should be allowed to offer a key financial backstop.
In 2012, the bank helped calm Europe’s debt crisis by saying it could buy the bonds of countries whose governments face excessive market borrowing costs.
Such spiraling costs can push a country into a bailout, as previously happened with Greece, Portugal and Ireland. The offer was never used, but reassured markets.
The offer was challenged by a conservative German lawmaker and others who argue the ECB overstepped its legal powers.
A court official issued a preliminary opinion in January saying the bond purchase offer was permitted under the basic European Union treaty. The judges don’t have to follow preliminary opinions.
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