Senior Economics Correspondent, Germany
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Jul 21, 2014

Bundesbank sees Q2 German stagnation, IMF upbeat on full year

BERLIN/FRANKFURT, July 21 (Reuters) – The German economy
probably stagnated in the second quarter in the face of
political tensions abroad, the Bundesbank said on Monday, but
chances are its recovery will not be held up for long by
conflicts on the rim of Europe.

Highlighting the underlying strength of Europe’s largest
economy, the International Monetary Fund raised its forecasts
for German growth, projecting an expansion of 1.9 percent this
year – up from the 1.7 percent it had previously projected.

Jul 21, 2014

Bundesbank sees German economy stagnating in second quarter

FRANKFURT (Reuters) – The German economy probably stagnated in the second quarter in the face of political tensions abroad, the Bundesbank said on Monday, but chances are its recovery will not be held up for long by conflicts on the rim of Europe.

German construction activity in April and May was below that of the mild winter months, the German central bank said.

Jul 16, 2014

Nowotny says he is not sure ECB’s ABS plan would fly

FRANKFURT, July 16 (Reuters) – A European Central Bank
policymaker cast doubt on Wednesday on whether the ECB will go
ahead and buy asset-backed securities – trumpeted last month as
a possible measure to help revive the euro zone economy.

The ECB, which announced a barrage of measures in June to
pump money into the sluggish euro zone economy, has said it is
stepping up preparations to buy ABS in future, which it sees as
a way to help channel funding to smaller businesses in the bloc.

Jul 9, 2014

ECB looks to banks to deliver QE on its behalf

FRANKFURT/PARIS, July 9 (Reuters) – The European Central
Bank is hoping a new round of long-term loans will be used by
banks to drive down borrowing costs – a substitute for an
asset-purchase scheme of its own which would avert a potentially
damaging internal split.

The ECB unveiled the loans plan last month as part of a
package of measures to breathe life into a sluggish euro zone
economy, where inflation is running far below the central bank’s
target and there is a dearth of credit to smaller firms.

Jul 3, 2014

ECB says measures will push inflation up, but money-printing still possible

FRANKFURT (Reuters) – A raft of policy measures introduced last month will help lift inflation and support bank lending but the European Central Bank stands ready to create money in future if required, President Mario Draghi said on Thursday.

The ECB left interest rates steady a month after cutting them to record lows and pushing the deposit rate into negative territory for the first time – effectively charging banks for holding their money overnight to prompt them to lend to businesses.

Jul 3, 2014

ECB holds rates, faces grilling on new measures

FRANKFURT (Reuters) – The European Central Bank left interest rates unchanged at record lows on Thursday, holding fire while it assesses the impact of a barrage of measures launched last month to pep up the flagging euro zone economy.

The ECB held its main refinancing rate at 0.15 percent and its deposit rate at -0.10 percent, effectively charging banks for holding their money overnight as it tries to encourage them to lend to small- and medium-sized businesses.

Jul 1, 2014

ECB’s Draghi faces questions over guidance on rates

FRANKFURT (Reuters) – European Central Bank President Mario Draghi faces a grilling after Thursday’s policy meeting over forward guidance on interest rates after he hinted at a stronger message last week without being specific.

To breathe life into a sluggish euro zone, the ECB cut interest rates to record lows at its June 5 meeting, launched a series of measures to pump money into the economy and pledged to do more if needed to fight off the risk of Japan-like deflation.

Jun 6, 2014

Facing barriers, Draghi will keep markets waiting for any more ECB action

FRANKFURT (Reuters) – European Central Bank chief Mario Draghi has whetted markets’ appetite for more ECB policy action but investors will have to wait some time before he uses the only real option he has left – a major asset-buying plan.

First he will want to assess the effectiveness of the loosening package he presented on Thursday – rate cuts and measures to pump money into the sluggish euro zone economy. Then he will also have to overcome German resistance if he wants to do anything further.

Jun 6, 2014

Analysis – Facing barriers, Draghi will keep markets waiting for any more ECB action

FRANKFURT (Reuters) – European Central Bank chief Mario Draghi has whetted markets’ appetite for more ECB policy action but investors will have to wait some time before he uses the only real option he has left – a major asset-buying plan.

First he will want to assess the effectiveness of the loosening package he presented on Thursday – rate cuts and measures to pump money into the sluggish euro zone economy. Then he will also have to overcome German resistance if he wants to do anything further.

May 30, 2014

To avoid rate cut backfiring, banks will need incentive from ECB

FRANKFURT/LONDON (Reuters) – The European Central Bank is gearing up to charge banks for depositing with it, something that will require careful manoeuvring if it is not to create the opposite result from that intended.

The idea of negative rates – essentially making banks pay for having their funds held overnight – is to push banks into lending the money, hence boosting the economy.

    • 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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