The European Union agreement to disburse rescue funds to member countries funded by common debt is compatible with EU treaties, European Central Bank Governing Council member Pablo Hernandez de Cos said on Monday.
Germany’s constitutional court said on Friday it was looking into an emergency appeal by five plaintiffs there against the debt-financed investment plan.
“I have no doubt that the European agreement is perfectly compatible with the treaty,” de Cos, who is also governor of the Bank of Spain, said during an event held in Madrid by news agency Europa Press.
The EU governments have agreed to allow the European Commission to raise up to 750 billion euros in capital markets and pass on the money to member states worst hit by the pandemic through payments linked to jointly agreed reform and investment plans, partly as grants and partly as loans.
The European Commission said on Friday it was confident the questioned decision would stand in the German court.
Opponents of the EU’s recovery plan, including the far-right Alternative for Germany (AfD) party and a group called Citizens’ Will Alliance, argue that it violates European treaties by opening the door to joint borrowing by member states. [Reuters]