The ECB is now giving indications that it will postpone the periphery bond purchases that nearly everyone in the Eurozone is anxiously waiting for. The ECB president may have to wait a bit further until Germany’s Constitutional Court rules on the legitimacy of Europe’s permanent bailout fund prior to inaugurating the full aspects of his plans to purchase government bonds.

With the court ready to set its final decision on the second week of September, investors might well be disappointed because the press conference set spoke on conditions of extreme anonymity since the deliberations are not to be made public. Although the programme is still in its beta testing stage the officials overseeing it that is familiar with the thinking of the ECB Governing Council declined to disclose any more information.

According to some sources, the above mentioned statements were merely forms of excuses of Germany’s Constitutional Court in order to attach one several strings to the ESM’s execution plan. For now, the ECB’s decision is still vague with its ties to its approval and that there is simply no such agreement with the asset purchase arrangement.

While the ECB president is scheduled to give a progress report on the bond plan on September, the final structure of the ECB’s programme may highly depend over the vagueness over the permanent bailout fund that is still being resolved.

Here are JPMorgan’s comments on the holdup: Very few are thinking about the likelihood that the German Constitutional Court will consider the ESM illegal and will hinder its progress into a law. Although the court expresses some suspicion about the legislation it will most likely be blocked.

The ‘excuse’ of the ruling on the second week of September has the guilty verdict that the asset purchase plan is indeed going to push through, though the work on the plan is still yet not complete. Allowing for the summer break in August, the institution with the resources of the ECB has the capability to fulfill the technicalities in the policy set by the period between meetings if it could be considered.

The ECB chairman has been suspected of merely delaying its efforts in polishing the final plans in its policy making decisions which contributes to more speculations that the sense of opinion resonating within the council is deeply divided therefore its commitment to any policy for that matter will be but a shallow plan that in turn could possibly destabilise the effectiveness of policy interventions in the future.

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