Bloomberg reports, citing a draft legal report by the Bundestag
This relates to the German constitutional court ruling last month, with the lower house in parliament (Bundestag) reportedly stating that the government must comply with the constitutional court ruling on bond purchases by the ECB.
The report also adds that not responding to the ruling ‘is not an option’ and discusses a series of options allowing the Bundesbank to comply with the ruling without possibly meddling into ECB affairs.
That said, the report argues that the Bundesbank will have to ultimately take responsibility to evaluate the proportionality of the ECB bond buying programme and must cut back on existing purchases should this be the case.
There’s still time for this to run so I wouldn’t expect any major developments during the interim, but it is something worth taking note of in the coming months in case it does actually blow up into a surprise risk factor for the euro and the ECB.