FRANKFURT Germany’s Bundesbank cut its growth outlook on Friday and now expects the euro zone’s largest economy to barely grow in 2013, while it also pointed to risks of a recession as the euro zone debt crisis takes its toll. The Bundesbank expects Germany’s economy to grow just 0.4 percent next year, down from an earlier forecast in June of 1.6 percent. The move comes a day after the European Central Bank cut its forecasts for next year, pointing to weaker growth prospects for the bloc’s core countries such as Germany, France and the Netherlands. Germany has been a key […]
FRANKFURT Germany’s Bundesbank confirmed that its president, Jens Weidmann, voted against the bond-buying proposal unveiled Thursday by European Central Bank President Mario Draghi. A spokesman said Weidmann opposed the measures, which he viewed as “too close” to central-bank financing of government deficits “with a printing press.” Draghi, in a news conference, said there was one dissenting vote on the program, but didn’t identify who cast it. Weidmann’s opposition to the plan, however, was no secret. The Bundesbank chief last month made a similar complaint to a German news magazine and warned that central-bank bond purchases could prove to be “addictive.”
FRANKFURT German Bundesbank President Jens Weidmann repeatedly considered submitting his resignation in recent weeks amid disagreement with plans pushed by European Central Bank President Mario Draghi to begin a new, aggressive program of government-bond purchases, German newspaper Bild reported Friday. The newspaper, citing unnamed financial sources, said Weidmann was persuaded to stay in his post, where he would fight the bond-buying plan at Thursday’s meeting of the ECB Governing Council. Weidmann earlier this week told Germany’s Der Spiegel magazine he would be most effective by staying in office. A Bundesbank spokeswoman declined to comment on the Bild report.
Quest: What can central banks do? Mr Weidmann’s comments appeared on the Bundesbank website a day ahead of the conclusion of the ECB’s policy-setting meeting, and were seen by some investors as a warning shot to Mario Draghi, ECB president, against stepping up ECB intervention in the eurozone crisis. Mr Draghi last week raised hopes that the ECB was preparing a fresh round of measures to tackle the crisis, lowering [ Read More ]