ECB's Praet: Referral of OMT Case to European Court 'Good Decision' - Report

Germany's highest court was right to refer the case to determine the legality of the European Central Bank's bond-buying program to the European Court of Justice, a top ECB official said Saturday.

"The case was referring to the European Court of Justice, which the ECB deems to be a good decision," Peter Praet, an ECB executive board member told Expresso, a Portuguese newspaper, in an interview released by the ECB on Saturday.

Germany's Constitutional Court said this month that the ECB's Outright Monetary Transactions program may have exceeded the central bank's mandate, before it passed the case on to the European Court of Justice inLuxembourg. The German court reserved the right to later decide whether the Luxembourg court's opinion is in line with German law.

In the interview, Mr. Praet said independently of the court case, the OMT program still exists.

"The instrument is there. For us nothing has changed," he said.

Turning to the euro zone, the ECB's top economist admitted that price pressures are "quite weak" at the moment, but said the ECB sees no risk of deflation. He reiterated that the ECB has tools at its disposal, if necessary, to maintain price stability, which the ECB defines as inflation just under 2% over the medium term.

"If our mandate is at risk, we will act without hesitation," Mr. Praet said.

Newspaper website: http://expresso.sapo.pt/

--Write to the Frankfurt Bureau at djnews.frankfurt@dowjones.com

(END) Dow Jones Newswires

February 22, 2014 05:18 ET (10:18 GMT)

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