ECB Plea

Draghi to Germany: Just Be Patient

  • Why it matters

    Why it matters

    The European Central Bank on Thursday decided to keep the euro zone interest rate unchanged, a decision likely to annoy German politicians and consumers who fear the erosion of their savings.

  • Facts


    • The ECB’s governing council on Thursday decided to keep rates unchanged and made no changes to its previously announced €60 billion per month bond-buying program.
    • Germans are waiting for a change in interest rate policy, however, worried about financial stability and consumer unrest.
    • German Finance Minister Schäuble told Bloomberg TV he would have a hard time explaining the ECB’s decision at home.
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European Central Bank President Mario Draghi Announces Interest Rate Decision
Mario Draghi is pretty happy with the ECB's policies, even if Germany isn't. Source: Bloomberg

German economists weren’t really expecting any major new announcements from the European Central Bank on Thursday, but that doesn’t mean they weren’t hoping.

“The euro zone’s pain is easing, and the ECB should really have talked about higher interest rates today,” Joerg Kraemer, chief economist of Germany’s Commerzbank, said in a research note on Thursday.

He’s not alone. With inflation in Germany on the rise, complaints from the more conservative economic quarters in Berlin and Frankfurt have once again been growing louder. Many are demanding the euro-zone’s top central bank ease up on the tens of billions of euros it is pumping into the currency bloc’s economy each month. Or, if it’s not going to change course now, they had at least hoped for a few signals from the ECB about when it might start thinking about winding down its bond-buying program, or even raise interest rates from their current record lows.

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