Sakari's Feed
Mar 24, 2014

Finnish hopes for fragile growth hit by Ukraine crisis

HELSINKI, March 24 (Reuters) – Russia’s takeover of Crimea
has put Europe in an economic quandary, and Finland may be
getting squeezed the hardest of all western European countries.

Finnish politicians support Europe Union unity in action
against Russia in its conflict with Ukraine. But they are
uneasily aware of how sanctions would backfire against Europe’s
and especially Finland’s economy.

Mar 24, 2014

ECB keeping eye on euro exchange rate – Liikanen

HELSINKI (Reuters) – The European Central Bank keeps a close eye on the euro exchange rate to see how it affects inflation, and it stands ready to act if the inflation rate appears headed in the wrong direction, ECB Governing Council member Erkki Liikanen said on Monday.

The euro’s exchange rate is not an ECB policy target, but it has become increasingly relevant in the central bank’s economic assessment. A stronger euro could hamper the 28-country bloc’s recovery and weigh on already-low inflation.

Feb 27, 2014

Fed’s Fisher says happy with pace of QE withdrawal

FRANKFURT, Feb 27 (Reuters) – Dallas Federal Reserve Bank
President Richard Fisher said on Thursday he would like the U.S.
central bank to continue scaling back its monthly bond-buying
stimulus at the current pace of $10 billion at each policy

If U.S. economic growth picked up significantly, Fisher
said, he “of course might be in favour of further reduction”,
but even if he did support such a step, he said he knew he
“wouldn’t win the argument”.

Feb 18, 2014

German investor morale drops unexpectedly in February

MANNHEIM, Germany (Reuters) – German analyst and investor sentiment fell in February due to concerns that the economic upturn in the United States could lose steam and worries about emerging market economies’ prospects in the medium-term, a survey showed on Tuesday.

The Mannheim-based ZEW economic think tank’s monthly poll of economic sentiment dropped to 55.7 from 61.7 in January, falling well short of the consensus forecast in a Reuters poll of analysts for it to hold steady. It was the lowest reading since November.

Feb 10, 2014

ECB bond-buy tool weakened by German court: ZEW chief

FRANKFURT (Reuters) – The European Central Bank’s flagship crisis-fighting tool has been severely blunted by the assertion of Germany’s top court that it exceeded the ECB’s mandate, the head of the German ZEW think tank said.

Germany’s Constitutional Court will refer a complaint against the plan to the European Court of Justice but, in an apparent attempt to direct the ECJ’s deliberations, said the scheme appeared to violate a ban on the ECB funding governments.

Feb 6, 2014

ECB holds rates at record low, puts focus on March

FRANKFURT, Feb 6 (Reuters) – The European Central Bank left
interest rates at a record low on Thursday but put markets on
alert for a possible move in March, acknowledging that
emerging-market turbulence could hit the euro zone.

Risks to the currency bloc’s economy remain skewed to the
downside, ECB President Mario Draghi said after interest rates
were held at 0.25 percent, and inflation would be low for a
protracted period.

Feb 6, 2014

ECB holds rates to assess deflation threat

FRANKFURT, Feb 6 (Reuters) – The European Central Bank left
interest rates unchanged on Thursday, holding off policy action
while it waits for new economic forecasts next month to assess
the deflation threat facing the euro zone.

A sharp drop in euro zone inflation to 0.7 percent in
January, well below the ECB’s target of just under 2 percent,
would have focused the minds of the bank’s policymakers.

Feb 6, 2014

Falling inflation puts ECB easing bias to test

FRANKFURT (Reuters) – European Central Bank policymakers meeting on Thursday face a dilemma after a surprise fall in inflation brought the euro zone closer to slipping into deflation, but with the growth outlook intact they might hold off on action for now.

Annual inflation in the currency bloc slowed to 0.7 percent in January, well below the ECB’s target of just under 2 percent, venturing deeper into what ECB President Mario Draghi has dubbed the danger zone.

Feb 4, 2014

Falling bank rates in euro zone periphery add to recovery hopes

FRANKFURT (Reuters) – The interest firms had to pay on loans ticked down in the euro zone in December, with southern European countries seeing the biggest falls, data showed on Tuesday, in a boost to the currency bloc’s crisis-hit states.

The European Central Bank can take some solace from the development as evidence that its efforts to repair the so-called “fragmentation” of credit markets across the euro zone is having some success.

Jan 24, 2014
via MacroScope

Will rounding cents bring euro zone down?


The 18-country euro zone has had a rough ride in the past 6 years, and even with the glimmers of good news reaching the darkest corners of the debt crisis, the European Central Bank has been anything but ready to sound a crisis-over siren.

Right after ECB President Mario Draghi warned against undue optimism, the central bank has identified a new threat to the common currency’s integrity – rounding up or down small change.

    • About Sakari

      "I am part of the Reuters team covering the European Central Bank. Before moving to Frankfurt in early 2009, I was based in Helsinki, where I wrote about the Finnish economy and paper industry."
      Joined Reuters:
      Finnish, English, German, Swedish
    • Contact Sakari

    • Follow Sakari