The ECB Responds Without Hesitation To German Constitutional Court Ruling But Must Build Bridges

Intermoney | In the name of the ECB independence, Christine Lagarde, made it clear that the only guide for the institution is the fulfilment of its mandate and no resources or efforts will be spared in this task. Once the central bank has made it clear that it does not accept the authority of the German courts, it must move on towards a more political phase in which it can build bridges and provide a solution to the problem. If it does not do so within three months, the Bundesbank could find itself in a difficult legal mess.

Both official and deposit rates are starting to thaw

Ewald Nowotny, a member of the ECB Governing Council said recently he was comfortable with the possibility of an increase in the deposit rate, from -0.4% to -0.2%, “as a first step” before any change in the official interest rate. At April 6, European banks kept 690, 384 million euros in the ECB. It’s the first time, since interest rates have been at a record low of 0%, that an ECB member has talked so clearly about a rise.

The Last Thing Europe Needs Is Helicopter Money

Milton Friedman once wrote (1969) something like a short story about money creation. A helicopter drops banknotes amongst the population: a few lines in an article on how ‘to create’ inflation when the economic policy measures are thought to be exhausted.

Germany expects a record year in employment

Germany 2015: Some happy news, yet not enough to revive eurozone’s growth

BERLIN | By Alberto LozanoThe German economy has gone from growing at 0.8% q-o-q earlier this year to being on the verge of recession as a result of the geopolitical situation, especially after the sanctions against Russia. Only now in December the country seems to recover its confidence. However, an expected GDP growth of around 1% in 2015 continues to be insufficient to spur growth in the Eurozone.

ECB: We need a QE shot (not 17 of them, JPMorgan)

MADRID | The Corner | It’s speculation day before the European Central Bank’s tomorrow meeting. Will a QE plan finally be announced? Experts at Santander bank think that, if announced too early, it could damage TLTROs. JP Morgan economists believe there is a 30% chance we’ll get a QE shot in 2014, 50% next year. And they’ve come with a proposal we find erratic: 17 different bond buying plans, one for each state member. That is exactly the opposite direction the EU needs to be heading to.

No Picture

Bundesbank: the economy has not changed direction

BERLIN | Alberto Lozano | After the strong performance of the German stock market yesterday, one of the hardest hit in recent weeks by the greater exposure of its companies to the Russian market, Bundesbank president Jens Weidmann expressed his confidence in the growth of the German economy and the euro area during the second half of the year after the paralysis of the second quarter. In fact, Bundesbank considers that the “accumulation of bad news” is responsible of the decline in the 2Q, what could change the spring forecasts, although the basic trend suggests a strengthening in the second half of the year. Moreover, the Bundesbank wanted to make clear that although “the sentiment has deteriorated from a high level, the fact that the trend for domestic demand continues basically high suggests the economy has not changed direction.”