German investment boost would not help economy - Bundesbank
Reuters
Published Nov 17, 2014 11:47
German investment boost would not help economy - Bundesbank
FRANKFURT (Reuters) - Increasing investment would help neither the euro zone, nor the German economy, Germany's Bundesbank said on Monday, reinforcing Berlin's reluctance to spend more to help kickstart the bloc's ailing economy.
Chancellor Angela Merkel's government is under pressure from European partners and German industry to boost public investment in order to stimulate the German and wider European economy, but is not keen to spend more.
"An additional, debt-financed economic package...would not be constructive for the economic situation in Germany, or the comparatively meagre stimuli it is expected to give to the rest of the euro zone," the Bundesbank said in its monthly report.
"In view of the considerable uncertainty surrounding the global and European economy, it seems appropriate for the moment to continue in the fiscal direction laid out in previous planning."
Europe's largest economy, which narrowly avoided a recession in the third quarter, is unlikely to pick up before the end of the year, the Bundesbank said.
"The continued gloomy business expectations and the stagnating new orders point to a sluggish economic development in Germany at least until the end of 2014," it said.
(Reporting by Alice Baghdjian; editing by John O'Donnell)
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