Bundesbank President and the ECB Governing Council member – Jens Weidmann was out on the wires in the last hour saying that German growth dip is proving to be more persistent than initially thought.
Germany likely posted solid Q1 growth but this was helped by one-offs, like mild weather. Despite solid Q1, there is still no overall improvement in the economy. Low borrowing costs, rising wages, more supportive fiscal policy suggest that growth will pick up later this year and a growth of 0.5% this year seems very plausible, Weidmann added further.
Additional quotes:
“¢ Banks pay only marginal sums to ECB on negative rates.
“¢ Relief for banks from deposit rate charge would be more than offset by the cost of slower normalization.
“¢ Improving banking profitability is a challenge for the industry.
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