ECB should not be used to finance national borrowing, which is explicitly prohibited by its founding treaty.

To trigger the ECB’s power to buy sovereign debt under OMT, a country must first have been granted a rescue programme from the European Stability Mechanism. 

This would need a unanimous vote from all eurozone members, which gives Germany a veto.

For the distressed borrower, the conditionality this implies would be humiliating. 

Mr Draghi never had to put OMT into effect and, even now, no one wants to invoke the mechanism to support the stressed states in the pandemic.

FT 3 April 2020


Germany is the largest guarantor of the OMT






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