By Michelle Martin
BERLIN (Reuters) - A new German court challenge of the European Central Bank is unlikely to alter monetary policy but may test an already edgy relationship between the euro zone's biggest economy and its central bank, experts said on Tuesday.
A group of professors and entrepreneurs have asked Germany's top court to block the purchase of corporate bonds by the Bundesbank for the ECB, arguing that the purchases carry unforeseeable risk and constitute an abuse of central banking power.
The challenge, part of the group's long-running effort to curb the ECB's powers, come just weeks after tensions flared between the bank and Germany, culminating in comments by Finance Minister Wolfgang Schaeuble that loose monetary was partly to blame for the rise of the right-wing AfD party.
Bundesbank chief Jens Weidmann argued on Tuesday that the ECB's asset buying schemes blurs the line between fiscal and monetary policy and the bank is taking on undue government liability.
Still, experts said the legal challenge was likely to fail because the ECB's actions were not unusual in the world of central banking and the German court might also lack jurisdiction.
The group's failure last year to stop an emergency bond buying scheme in the European Court of Justice also suggests that the new challenge would struggle.
"I don't think the Constitutional Court will consider this complaint admissible at all because I don't think the conditions that would be needed for that have been met, namely that the ECB is clearly and considerably acting beyond its remit," Alexander Thiele, a professor of law at Berlin's Free University said.
The ECB will launch the corporate bond buying program in June, part of its 1.7 trillion euro asset purchase program seeking to boost inflation from around zero back toward 2 percent.
"I don’t see any chance of this going anywhere," Christian Odendahl, chief economist at the Centre for European Reform said of latest legal challenge.
"I think that the complaint against sovereign bond buying program had higher chances of success but didn’t succeed," Odendahl said. "The European Court of Justice argued that even this is inside the ECB’s mandate. So the purchase of private assets is clearly within the ECB’s mandate."
The ECB has rolled out extraordinary stimulus in the past two years to avert deflation and boost prices, much the same way other major central banks have done around the globe.
European law also exempts the Frankfurt-based ECB from most German laws and gives the European Court of Justice the right to review its acts.