ECB Under Pressure As German Inflation Spikes To Highest Since 2013

Tyler Durden's picture

German consumer prices accelerated at the fastest pace in three and a half years in January, leaving the ECB running out of excuses to maintain (or even extend) its stimulus measures. 

As Bloomberg notes, consumer prices rose 1.9 percent from a year ago, data from the Federal Statistics Office showed on Monday. That’s up from 1.7 percent the previous month and the highest rate since July 2013, though below the median estimate of 2 percent in a Bloomberg survey. Prices slid 0.8 percent from December.

The surge in German inflation since the end of last year is a potential political flashpoint in the country, which faces elections in September, as savers remain burdened with near-zero deposit rates. Calls are mounting for the ECB to start talks over winding down its bond-buying program, which is scheduled to run until at least the end of this year, though policy makers have generally urged caution until it’s clear price increases are being sustained in the euro area as a whole.

Simply put, the 'union' continues to creek under the one policy...

“Monetary policy can’t just cater to one country but to the entire euro-zone economy,” Ewald Nowotny, governor of Austria’s central bank said on Monday in Vienna before the data were published. “German developments are watched, but they are just a part.”


Nowotny said that while the ECB’s Governing Council will “surely” have to take a decision on the future of quantitative easing before the end of 2017, he doesn’t expect that to happen until after the summer.

And remember, Draghi already laid out the cost of exiting Europe, which in the case of Germany (and GERexit) is one in which the entire union owes them...


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USisCorrupt's picture


I'm with TRUMP !

NewHugh's picture

Hm they need to get some of the USSA "financial experts" to show them how to more effectively LIE about the actual domestic inflation rate.

kurzdump's picture

It's the money spent on refugees that drives inflation.

SpanishGoop's picture

Let's see.

28 x 2 = 56.

27 * 1.1 (eu average) = 29.7

56 - 29.7 = 26.3

Long inflationary way to go for Germany to come to a 2% EU average.


orangegeek's picture

Inflation??? LMFAO!!!


The average European doesn't spend shit - they are taxed to death and don't procreate.


Europe relies on American tourists for consumption - and we all know how that is going.


The only thing that keeps Europe going is their underground economy/black market - and this fuckheads in Brussels want to ban cash.  LMFAO - brilliant!!!!

silverer's picture

How do you pronounce EU? Is it like "eeewww"? Or maybe "Extra ucky"?

hooligan2009's picture

one of the corrollaries of ECB hegemomy over fiscal policy in Europe is the political consequence of perpetuating favor to those that produce quality at the cheapest price, compared to those that don't.

the germans have more quality producers than the rest of europe combined and the ECB provides heavy subsidies in the form of trade finance at negative rates. the rest of europe's low quality and expensive producers cannot compete.

germany has chosen to further exploit this advantage by flooding europe with economic migrants (not refugees, economic migrants) from MENA. this further prejudices european countries on the fiscal side.

the ECB is complicit in the continuing trade and fiscal decline of all countries in europe, even including germany, by allowing EU countries to buy german goods without working for them, or indeed, even paying for them, by creating fiat currency that never has to be paid back.

this trade financing is the same model that Nokia used and which brought about the collapse of Nokia. People buy Nokia phones, financed by Nokia. AAPL, does the same via the more circuitous route of transfer pricing and tax evasion.

you reap what you sow.

there is going to be a re-acclereration of the european fiscal crisis in the next year or so, as the elections roll through europe.

at the heart of it all is the knwoledge amongs sensible and progressive europeans that government finances that tax effort and reward sloth are not a sound basis for a nation state or a union of states.

Econogeek's picture

Belgian cpi spiked too; hard to imagine the ECB cutting purchases before the French elections.  Rock and hard place.