The ruling – which happened only in the last few minutes – likely means that, until the European Court of Justice has made a final ruling (which could take months/years), the European Central Bank will be prevented from bailing out ailing sovereign bonds in EU member states – this OMT (“Outright Monetary Transactions“) policy being one of the key factors in the recent improvements in Eurozone stability.
There are a number of other potential medium-long-term implications, so expect much debate in the coming hours/days.
One of the most interesting, though, is this – pointed out on Twitter by Shahin Vallée, economic adviser to Herman van Rompuy:
“Karlsruhe admits incompetences to judge compliance to EU treaty and establishes superiority of EU law over German one”
Meanwhile, others are speculating that the decision to refer to the ECJ will likely necessitate a future treaty change to increase the ECB’s ability to act.
All that is certain is that, for now, the spectre of Eurozone economic uncertainty has come back – and we don’t know how long for. It could be a matter of months, years – or just minutes, if someone in a position of sufficient authority is able to calm the markets with a clear enough vision of what’s next.
All I know is that I’m going to be keeping a close eye on my Europe Opinion Twitter list today, with the other eye on the markets, to see how jittery they get.