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Frosty euro zone outlook from the Bundesbank

Tuesday, March 12, 2013 - 01:52

March 12 - The euro zone crisis is not over, the Bundesbank has set aside billions in new provisions for what it sees as risky European Central Bank moves, Germany's central bank said on Tuesday.

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Winter's returned to Germany and so too has the euro zone debt crisis - that's the verdict of the Bundesbank - Germany's central bank. It's set aside an extra 6.7 billion euros in new provisions against what it sees as risky moves by the ECB. As a result it's paying the German government less than half what it expected. Jens Weidmann, Bundesbank President and member of the ECB governing council wants to see more reforms from governments. (SOUNDBITE) (German) HEAD OF GERMAN CENTRAL BANK 'BUNDESBANK' AND MEMBER OF THE ECB'S GOVERNING COUNCIL, JENS WEIDMANN, SAYING: "Europe can only get back trust and overcome this crisis permanently if the causes are addressed." The German government had been expecting 1.5 billion euros from the bank - instead profit remained largely unchanged at 664 million. That's not much more than Germany is handing to Greece as part of the bailout deal. Weidmann justified the decision by saying governments shouldn't be looking to the ECB for help. (SOUNDBITE) German) HEAD OF GERMAN CENTRAL BANK 'BUNDESBANK' AND MEMBER OF THE ECB'S GOVERNING COUNCIL, JENS WEIDMANN, SAYING: "In some cases national politics do not give a clear direction. For instance the reform course in France seems to have floundered, in Italy there's the elections, and in Cyprus the entire situation is unclear. The crisis is not over, despite the temporary calming of the markets" There's no suggestion Europe's economic powerhouse is struggling. Growth is expected to strengthen this year after slowing in late 2012. Imports and exports also rebounded in January. The Bundesbank may be gloomy about other euro zone economies but Germany's is - it said - "in good shape".

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Frosty euro zone outlook from the Bundesbank

Tuesday, March 12, 2013 - 01:52