Germany's best-selling newspaper, Bild, on Friday accused European Central ...
BERLIN - Germany’s best-selling newspaper, Bild, on Friday accused European Central Bank President Mario Draghi of “sucking dry” the accounts of Germany’s savers, a day after the bank cut interest rates deeper into negative territory.
The bigger-than-expected stimulus immediately fuelled concerns among frugal Germans, who have complained for years that the ECB’s is denying them a decent rate of return on their savings. “People who want to build will probably get cheap credit,” Weidmann said. “Savers will be worse off. But they could profit from secure jobs. It will be particularly difficult to make provisions for old age without taking more risk. Pension funds and life insurers will feel this most.”
Zero rates have fuelled a property boom in Germany, encouraging people to take out large home loans and attracting a flood of foreign money from international pension funds. Formed in 1957, it was a model for central bank independence in the years that followed, but its president is now just one voice on the ECB’s Governing Council.
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