The commencement last week of the German Constitutional Court hearing into the legality of the European Central Bank’s Outright Monetary Transactions (OMTs) programme has re-stoked the debate over the ECB’s remit and the appropriate breadth of its responsibilities. But a further fall in euro-zone inflation – and even the threat of deflation – would weaken the objections of Bundesbank President Jens Weidmann and others to more decisive unconventional policy action from the central bank.
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