Senior Economics Correspondent, Germany
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Feb 26, 2015

Euro zone lending shows sign of turnaround as morale improves

FRANKFURT (Reuters) – Bank lending in the euro zone fell slightly in January but at a slower pace than a month earlier, suggesting the economy may be turning a corner as consumer morale picks up in the bloc’s largest economies.

European Central Bank President Mario Draghi said late on Wednesday that “all in all, the outlook is more positive than it was a few months ago” in the 19-country euro zone, which has been blighted by recession in the south and falling prices.

Feb 18, 2015

ECB tightens pressure on Greece with cap on bank funding

FRANKFURT (Reuters) – The European Central Bank agreed a modest increase in emergency funding for Greek banks on Wednesday, putting pressure on Athens to strike a financing deal with its European partners before its lenders run out of money.

The ECB Governing Council, meeting in Frankfurt, agreed to raise the provision of Emergency Liquidity Assistance (ELA) to 68.3 billion euros ($78 billion), a person familiar with the ECB talks said.

Feb 17, 2015

Greece faces resistance to extra emergency funds for banks -sources

FRANKFURT, Feb 18 (Reuters) – The European Central Bank
faces resistance from Germany to allowing any extra emergency
lending for Greek banks, people familiar with the matter said,
increasing pressure on Athens to sign up to an extended
aid-for-reform programme.

After talks between Greece and euro zone creditors broke
down acrimoniously on Monday, the ECB’s policymaking governing
council will review on Wednesday how far the country may support
its weak banks, which face rising deposit outflows.

Feb 15, 2015

Bank funding powers make Greece vulnerable to ECB pressure

FRANKFURT, Feb 15 (Reuters) – The European Central Bank’s
control over emergency funding for banks gives it the power to
prod countries into the kind of aid-and-reform programme that
Greece is desperate to escape.

The ECB is loath to pull the plug on Greece’s banks, a
scenario that would almost certainly lead to the country’s exit
from the euro zone. But if Athens refuses to extend the existing
programme or sign up to a new one it may have little choice.

Feb 15, 2015

ECB has track record with funding stick it holds over Greece

FRANKFURT, Feb 15 (Reuters) – With its power over emergency
funding for banks, the European Central Bank wields a big stick
that it has past form in waving to badger countries into the
kind of aid-and-reform programme that Greece is desperate to
escape.

The ECB is loath to pull the plug on Greece’s banks, a
scenario that would almost certainly lead to the country’s exit
from the euro zone, but if authorities in Athens refuse to
extend the existing programme or sign up to a new one it may
have little choice.

Feb 4, 2015

German ZEW chief sees one in five chance of Greece leaving euro

FRANKFURT (Reuters) – The probability of Greece leaving the euro zone has jumped from virtually nothing to at least 20 percent since Syriza’s Jan. 25 election victory, the head of the German ZEW think tank told Reuters.

In an interview for a Reuters summit on the euro zone, ZEW chief Clemens Fuest said the government of Prime Minister Alexis Tsipras risked talking Greece out of the bloc with unrealistic plans, a scenario that no one wanted.

Jan 31, 2015

Germany, ECB play hardball with Greece

BERLIN/HELSINKI (Reuters) – German Chancellor Angela Merkel ruled out a debt writedown for Greece on Saturday, and a European Central Bank policymaker threatened to cut off funding to Greek banks if Athens does not agree to renew its bailout package.

The euro zone’s paymaster and the ECB are both taking a tough line with Greece’s new leftist government, whose leader swept to victory last Sunday promising that five years of austerity, “humiliation and suffering” were over.

Jan 23, 2015

ECB’s trillion-euro move offers short-term boost, but at a cost

FRANKFURT, Jan 23 (Reuters) – ECB chief Mario Draghi’s 1
trillion euros of fresh money could prove the masterstroke that
saves the euro zone for now, but it breaks the principle that
the bloc acts as one, a move that could ultimately undermine the
currency he is trying to save.

In monthly 60 billion-euro instalments from March, the
European Central Bank will buy chiefly government debt at least
until September of next year, or as long as is needed to revive
inflation, which recently swung into reverse.

Jan 22, 2015

ECB launches last-ditch programme to revive euro economy

FRANKFURT (Reuters) – The European Central Bank took the ultimate policy leap on Thursday, launching a government bond-buying programme which will pump hundreds of billions of new money into a sagging euro zone economy.

The ECB said it would buy government bonds from this March until the end of September 2016 despite opposition from Germany’s Bundesbank and concerns in Berlin that it could allow spendthrift countries to slacken economic reforms.

Jan 22, 2015

ECB to decide on bond-buying plan to revive euro zone

FRANKFURT, Jan 22 (Reuters) – The European Central Bank is
poised to announce a plan on Thursday to buy government bonds,
resorting to its last big policy option for breathing life into
the flagging euro zone economy.

Market expectations are sky-high for the ECB to unveil
large-scale quantitative easing (QE) – printing money to buy
government bonds – despite opposition from Germany’s Bundesbank
and concerns in Berlin that this could allow spendthrift
countries to slacken economic reforms.

    • About Paul

      "I lead our economic news file from Berlin, where we report on the performance of the German economy – Europe’s largest – and economic policy: everything from financial regulation to dealing with the euro zone debt crisis. I previously reported on political and economic news from Paris and on earlier assignments worked in Frankfurt, Vienna and London."
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