Did the GCC torpedo the ECB?

In The German Constitutional Court Torpedoes The ECB’s OMT @ Fibs & Waves Blankfeind argues that the apparently bland resolution of the GCC yesterday does include some provisions that would torpedo the OMT’s effectiveness, even its existence. Please see Die wirkliche Wirklichkeit (DwW) where such provisions are discussed, but reaching a different conclusion from the one elaborated by Blankfeind. Can Blackfeind and TYR be both right?. We think so. Blankfeind, in his excellent article, explores the aspects in the GCC’s resolution that would make life difficult for the new Draghi-ECB, namely, the illegality of the ESM’s capital being levered (financing at the ECB, like a bank), and the illegality of the ECB’s buying government bonds on the secondary market aiming at financing the member’s budgets (which is what the  OMT is supposed to do). These are very strong limitations that, if applied, would effectively torpedo the ECB’s plans. DwW, while acknowledging the potential in the GCC’s ruling to abort the ECB’s plans, sustains that the “real reality” is one or several layers deeper than even a constitutional court’s ruling. In its last paragraph, DwW rethorically asks  “In whose hands does Germany’s sovereignty lay?”, hinting at the possibility that even GCC’s resolutions would, one way or another, be superseded by the real owners of Germany’s sovereignty, whose identity would certainly not be the German People. In plain words, Blankfeind is right in recognizing that with its ruling the GCC (up to a point, since it could have stopped the process of ratification of the ESM and chose not to) is preparing for a fight with the ECB, Germany will fight for its sovereignty and it might be a bitter fight. DwW fears though, that, in the end, that sovereignty was lost long ago.


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