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German finance minister moves to resolve court stand-off with ECB

Germany’s finance minister says the European Central Bank has fulfilled the requirements of a controversial ruling last month by the German constitutional court that cast the bank’s flagship bond-buying programme into doubt.

The letter from Olaf Scholz will raise hopes that the stand-off between the ECB and Germany’s highest court can soon be resolved and the bank can continue with its stimulus programme.

In a shock ruling last month, the constitutional court ordered the German government and parliament to ensure that the ECB provide a “proportionality assessment” of its €2.2tn sovereign bond-buying scheme.

It gave the ECB three months to justify its bond purchases under the Public Sector Purchase Programme (PSPP). If it failed to comply, the Bundesbank, Germany’s central bank, would no longer be allowed to participate in the scheme.

The ECB moved to resolve the impasse by releasing a number of unpublished documents to the Bundesbank, which were then passed on to the German government. These included minutes of past meetings at which the bank discussed buying sovereign bonds before it launched the policy in March 2015 and before it started publishing official accounts of its meetings that year.

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