The main reason for the injury is a sharp increase in interest rates by the European Central Bank (ECB), which began in 2022 to fight inflation.
The German Bundesbank for the first time since 1979 announced the losses that were recorded – 19.2 billion euros last year. Bild reported this on Tuesday, February 25th.
Accordingly, the bank has not transferred state budget funds for the fifth year, though earlier this is an important source of income for the federal government.
Bundesbank president Joachim Nagel admitted that the situation would remain difficult in the coming years, but the hope of the climax of financial losses expired.
The main reason for the injury is a sharp increase in interest rates by the European Central Bank (ECB), which began in 2022 to fight inflation. This led to an increase in the costs of Bundesbank to pay interest, while the income of previously obtained bonds remained low.
In 2023, the bank avoided losses due to the use of reserves, but by 2024 financial reserves reduced to 700 million euros.
The European Central Bank itself has also announced the greatest loss in its history – 7.9 billion euros, which proves serious pressure in the eurozone financial system.
At the same time, the Bundesbank note that the bank remains sustainable: Germany’s Gold and Foreign Exchange reserves are of value, and the total amount of gold and foreign currency in bank possessions reaches 267 billion euros.
The German Ministry of Finance, previously traditionally counted in annual revenues from Bundesbank of 2.5 billion euros, will be left again without payment. The last time the injury was recorded 45 years ago – in 1979, and then they were equivalent to 2.9 billion euros. Meanwhile, the ECB expects that by 2026 Inflation in Germany will return to the target level of 2%, which should strengthen the economic situation.
Remember that Germany said there was no budget money to increase defense costs to 5% of the GDP, as U.S. Elected Presidents Donald Trump were required from NATO countries.
Economic Stagnation in Germany: How to affect Ukraine’s help
New Vid CORRESPONDENT.NET On the telegram that whatsapp. PIDS Insialle Our Channel https://t.me/KorresPondentNet Ta WhatsApp
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.