The ECB’s selective bond purchases raised constitutional controversies from the start. The SMP was criticised for overstepping the lines of EU monetary policy and basically financing Member States. The OMT was an effective lender of last resort for governments, although never operationalised. The purchases also gave rise to the first substantive CJEU judgment on monetary policy. The chapter combines economic and legal research to get to the heart of the problems. Specific questions relate to the role of government bonds in the transmission of monetary policy, and to the risks of contagion and currency redenomination as justifiable reasons to selective bond purchases. The broader constitutional assessment of the ECB selective purchases finds many critical areas for the EMU constitutional architecture. Some solutions such as the CJEU's excessive reliance on the objectives of measures for defining them as common monetary policy or Member States economic policy left room for criticism. The chapter argues that the principle of conferral risks becoming void if the independent ECB can effectively dictate its own mandate, calling for a more economic definition of monetary policy. In addition, the circumstances around the programmes raised questions concerning the independence of the ECB.

Not only the member states should be given credit for the survival of the single currency. The European Central Bank deserves credit too. Throughout the crisis it resorted to ‘unconventional’ measures that have proven crucial for the stability of the currency union, especially its government bond programmes SMP and OMT. This chapter examines these programmes and argues that they are an intrinsic part of the transformation of the euro. Since the Bank’s mandate and constitutional position ultimately rest on the Founding Contract between the member states, it could not intervene in bond markets without a prior change in this Contract through which states committed themselves to a different currency union based on a broader stability conception. Only such a contractual change, and confirmation of it through concrete action, could provide the necessary political cover for bond purchases that pushed the boundaries of the Bank’s original mandate.