Britain wins court ruling against ECB on euro banks

BRITAIN won a court challenge Wednesday against a European Central Bank ruling that required banks to base clearing houses dealing with euros in the eurozone.

The British government had contested the ECB ruling, which would have caused major problems for London’s huge banking industry, as Britain does not use the euro.

The General Court of the European Union, the second highest court in the 28-nation bloc, said it had annulled the ruling.

It said the Frankfurt-based ECB “lacks the competence necessary to regulate the activity of securities clearing systems” and that the ruling “goes beyond mere oversight.”

The ECB may appeal the ruling, the Luxembourg-based court added.

If Britain had lost the ruling it could have forced banks to move their euro-dominated businesses inside the 19-country eurozone.

British finance minister George Osborne hailed the ruling against what he called the ECB’s “utterly discriminatory” policy.

“This is a major win for Britain and a major win for all those who want to see a European economy that is both open and successful,” he said in a statement.

The ruling comes at a sensitive time, two months before elections in which Prime Minister David Cameron’s vow to hold a referendum on Britain’s membership of the EU is a major issue.