Bundesbank may have cut Germany’s growth forecasts last week but the nation is still performing comparatively well, with modest growth projected and unemployment close to a twenty year low.
Now Chancellor Angela Merkel has asserted that if a re-eruption of the Eurozone crisis is to be avoided, other Eurozone nations must emulate Germany’s approach to fiscal policy.
Merkel asserted ‘It is greatly in Germany’s interest to do everything so that structural reforms and budget discipline can take place in other countries.’
Under Merkel’s direction Germany has taken a hard-line approach to tightening budgets and restructuring the labour market.
Although French President Francois Hollande once again declared that the Eurozone crisis is over, recent data says otherwise and the record high levels of unemployment in nations like Spain are still a real cause for concern.
Later this week Finance and Labour Ministers from Germany, France, Spain and Italy will meet in order to discuss a plan for tackling the regions youth unemployment rate, which currently stands at 24 per cent.
There are also fresh worries regarding Greek debt. In its latest report the International Monetary Fund asserted that the nation may require additional relief and that the level of its public debt could remain a risk to recovery, despite the progress it has made with spending cuts and tax increases.
Clearly, despite European Central Bank President Mario Draghi asserting last week that the Eurozone will have returned to growth by the end of the year, there are still some significant hurdles to overcome.
In other Eurozone news, the European Central Bank refuted a report in the Frankfurter Allgemeine Sonntagszeitung that the Outright Monetary Transactions programme (the central banks bond buying scheme) has a set limit. Spokesman Wiktor Krzyzanowski responded to the report in the following terms: ‘There are no ex-ante limits on the amount [of OMT borrowing] Their size would be adequate to meet their objective.’
Euro (EUR) Exchange Rates As of 09:00 –
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3184 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8504 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4015 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6808 <