* Court ruling on OMT had initially been expected in 2013
* Complexity of case, coalition talks may have delayed
* Court not expected to derail bond-buying programme
By Norbert Demuth
KARLSRUHE, Germany, Nov 21 Germany's
Constitutional Court will not rule this year, as originally
expected, on a complaint against the European Central Bank (ECB)
bond-buying programme that is widely credited with stabilising
the euro zone, a court spokesman said on Thursday.
The court is considering whether the ECB's plans to buy
"unlimited" amounts of bonds from stricken euro zone states,
announced last year at the height of the bloc's debt crisis, is
really a vehicle for funding member states through the back
door. That could violate German law.
"The decision in the ESM/ECB case will no longer be
announced this year," said the spokesman, adding the court was
still trying to make a decision as quickly as possible.
He said no further details were available.
The Karlsruhe-based court has never given a date for the
ruling, eagerly awaited by financial markets, but it had
initially been expected to come this year.
In recent weeks doubts about the timing surfaced, in part
due to the complexity of the case but also because of lengthy
talks on forming a coalition government in Germany.
Some legal experts believe the court could ultimately decide
to refer the case to the European Court of Justice.
The court held a two-day hearing in June after more than
35,000 Germans filed complaints against the ECB's bond-buying
instrument, known as Outright Monetary Transactions (OMT).
The plaintiffs argue that the OMT programme violates the
bank's mandate of achieving price stability and amounts to
illegal back-door financing of governments.
Bundesbank Chief Jens Weidmann was one of the most outspoken
opponents of the plan when it was first announced and testified
against it at the June hearing.
Karlsruhe cannot revoke the ECB scheme but in considering
whether it violates the German parliament's right to control the
budget, it could block the country's participation or challenge
certain aspects of the plan, such as its "unlimited" nature.
This could effectively derail the programme, which has
worked largely by giving investors the confidence to buy bonds,
safe in the knowledge the ECB would intervene on the secondary
market if any government were at serious risk of defaulting.
In earlier rulings the court has approved euro zone bailout
schemes while insisting the Bundestag, or lower house of
parliament, be consulted more fully.
Most analysts think it is unlikely to derail OMT altogether,
a step which could rekindle the crisis.
"We expect the court to express its concerns about some
aspects of the OMT, but no outright rejection of the programme
or other constraints that would dilute the effectiveness of the
OMT in a meaningful way," said Dirk Schumacher of Goldman Sachs
in a research note this week.