It Will Take a Bloodbath for Germans to Increase Fiscal Spending Again - Forex News by FX Leaders

It Will Take a Bloodbath for Germans to Increase Fiscal Spending Again

Posted Friday, February 28, 2020 by
Skerdian Meta • 1 min read

The European Central Bank has been calling for European governments to increase fiscal spending, to help the economy, alongside the monetary measures that the ECB took last year, such as lowering deposit rates to -0.50% and restarting the QE programme again.

We know those calls are directed at Germans, because Italians and the French are forever in debt. Yesterday we heard some German official release a report, saying that they might increase fiscal spending, as coronavirus advances. But, today we are hearing rumours that there won’t be an increase in spending, since cases of coronavirus in Germany are still low.

Comments by a German economy minister’s spokeswoman

  • German government says that no stimulus package is currently planned
  • Too early to assess economic damage from the virus outbreak
  • There are no signs of any supply bottlenecks
  • Assistance for firms are available if needed

I don’t even know how to begin to interpret this. No stimulus coming isn’t really a good thing, but then again they’re saying that everything is fine. Is it really? The Eurozone economy has improved a bit in recent months, but manufacturing still remains in recession and the coronavirus impact will be felt later. But, we’re talking about Germans increasing spending, so banging your head against the wall.

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