Bank of France Governor Christian Noyer told Handelsblatt that, if the ECB were to buy government bonds, he would favour “a cap” in terms of percentage of the market which the ECB can buy.Le Figaro reports that the European Commission will today unveil a communication detailing the “exceptional circumstances” under which Eurozone countries can be granted more flexibility on the achievement of their deficit and debt reduction targets.
Both of these actions--European Central Bank purchases of sovereign debt and allowing some countries to exceed their national deficit limits--are violations of the Maastricht Treaty, supposedly the founding legal basis of the European Union and the European Monetary Union (eurozone). This should be a warning to all nations who foolishly believe that they can give up their sovereignty to supranational organizations that will abide by their founding law. These supranational governments will behave no differently than national governments; i.e., they will take whatever power they can regardless of the law. But unlike the potential remedies to restrain those who violate national constitutions, supranational governments that violate their constitutions are restrained only by threats that members will leave. The EU and EMU governing boards act with impunity because they believe that lingering war guilt will keep Germany as a member even though it is against German national interest.