Senior Economics Correspondent, Germany
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Sep 4, 2014

ECB cuts rates, launches new credit scheme as growth evaporates

FRANKFURT (Reuters) – The European Central Bank cut interest rates to a fresh record low on Thursday and launched a new scheme to push money into the flagging euro zone economy.

In a series of measures underscoring growing concern about the currency bloc’s health, the ECB cut its main refinancing rate to 0.05 percent from 0.15 percent previously and drove the overnight deposit rate deeper into negative territory, now charging banks 0.20 percent to park funds with it.

Sep 4, 2014

ECB cuts rates to repel deflation threat as pressure mounts

FRANKFURT, Sept 4 (Reuters) – The European Central Bank cut
interest rates to a fresh record low on Thursday, unexpectedly
bringing borrowing costs close to zero to lift inflation from
rock-bottom levels and support the stagnating euro zone economy.

The ECB cut its main refinancing rate to 0.05 percent from
0.15 percent previously and drove the overnight deposit rate
deeper into negative territory, now charging banks 0.20 percent
to park funds with it.

Sep 3, 2014

Draghi under pressure of his own making to deliver ECB stimulus

FRANKFURT (Reuters) – The European Central Bank faces intense market pressure to take policy action on Thursday and risks losing credibility if it fails to back up a dovish message delivered by President Mario Draghi late last month.

Draghi ramped up expectations for Thursday’s ECB meeting when, departing from his speech text, he told the Jackson Hole central bankers’ conference on Aug. 22 that markets had indicated inflation expectations showed “significant declines” in August.

Aug 29, 2014

Analysis – Draghi dials R for Reform. Line is busy

FRANKFURT (Reuters) – Two years ago, euro zone government leaders hung on Mario Draghi’s every word. Now the European Central Bank chief is struggling to get through to them. What has happened to ‘Super Mario’s’ mojo?

For financial markets, Draghi’s words still count. But therein lies a problem – his promise in 2012 to do “whatever it takes” to save the euro has reassured investors and driven down government borrowing costs to near record lows.

Aug 29, 2014

Draghi dials R for Reform. Line is busy

FRANKFURT (Reuters) – Two years ago, euro zone government leaders hung on Mario Draghi’s every word. Now the European Central Bank chief is struggling to get through to them. What has happened to ‘Super Mario’s’ mojo?

For financial markets, Draghi’s words still count. But therein lies a problem – his promise in 2012 to do “whatever it takes” to save the euro has reassured investors and driven down government borrowing costs to near record lows.

Aug 25, 2014

About-face for ECB’s Draghi as he seeks to jolt euro zone into life

FRANKFURT (Reuters) – Prodding governments to do more to boost demand and hinting at European Central Bank action to go along with it marks a major shift in ECB chief Mario Draghi’s euro zone policy away from a focus on austerity toward reviving growth.

In a landmark speech on Friday, the ECB president said it would be “helpful for the overall stance of policy” if fiscal policy could play a greater role alongside the ECB’s monetary policy, adding: “and I believe there is scope for this”.

Aug 19, 2014

Analysis – ECB in policy limbo, boxed in by its own plans

FRANKFURT (Reuters) – The European Central Bank is in a policy no man’s land, bombarded by news of a stagnating euro zone economy but hesitant to move forward with new stimulus until measures it loaded in June have ignited.

After the ECB cut interest rates in June and promised banks cheap long-term loans starting in September, about all that is left is printing money to buy bonds – so-called quantitative easing (QE).

Aug 19, 2014

ECB in policy limbo, boxed in by its own plans

FRANKFURT (Reuters) – The European Central Bank is in a policy no man’s land, bombarded by news of a stagnating euro zone economy but hesitant to move forward with new stimulus until measures it loaded in June have ignited.

After the ECB cut interest rates in June and promised banks cheap long-term loans starting in September, about all that is left is printing money to buy bonds – so-called quantitative easing (QE).

Aug 14, 2014

ECB survey points to weaker inflation this year and next

FRANKFURT (Reuters) – Euro zone inflation will be weaker than previously expected this year and next, an updated survey for the European Central Bank indicated on Thursday, darkening the euro zone’s economic outlook.

The quarterly Survey of Professional Forecasters (SPF) also suggested that this year’s euro zone growth would be weaker than previously expected, adding to the bloc’s woes after the German economy shrank in the second quarter and France stagnated.

Jul 30, 2014

Banks loosen purse strings for euro zone businesses

FRANKFURT (Reuters) – Euro zone banks have loosened their lending terms for businesses for the first time since the start of the financial crisis, the European Central Bank said on Wednesday, reducing one of the chief obstacles to an economic rebound.

Since the start of a banking collapse, which struck Germany in 2007 with the near failure of small-business lender IKB, banks in Europe have remained reluctant to lend even as the clouds of crisis gradually lift.

    • 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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