Senior Economics Correspondent, Germany
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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.

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.

    • 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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