ANKARA
The European Court of Justice on Tuesday upheld the legality of the European Central Bank's bond-buying program.
The court in Luxembourg said the ECB has the right to buy the bonds of countries when borrowing costs to member state governments are exceptionally high.
That policy, referred to officially as Outright Monetary Transactions (OMT), has been in place since 2012.
"The program did not run afoul of the central bank's monetary powers and did not violate any rules related to the financing of eurozone member countries," the court said.
A group of German lawmakers and economists had mounted a challenge to ECB bond-buying in crisis conditions, claiming that it amounted to illegal financing under the ECB charter.
The central bank is forbidden from providing monetary support to member states.
Confirming the legality of OMT also means that the ECB's current large-scale bond-buying program will be safe from legal challenges. ECB stimulus has been putting 60 billion euros ($67.4 billion) into the eurozone economy each month since March.
High borrowing costs can push a country into a bailout, as happened with Greece, Portugal and Ireland. While the ECB has not used the facility in the past, it is viewed by financial markets as a safety valve in case of an impending crisis.
