Bavaria's finance minister railed against zero interest rate policy: "Expropriation for savers more and more noticeable"

The savings rate of Germans rose during the corona crisis to a record highbut their money is also worth less because of inflation. In view of the recent significant increase in consumer prices, Bavaria's Finance Minister Albert Füracker from the European Central Bank (ECB) called for an end to the zero interest rate policy.

»Germany is a saver country. The years Zero interest rate policy the ECB is poison for classic savings contracts, "said the CSU politician of the"picture"-Newspaper. "In combination with the now rising inflation, expropriation is becoming more and more noticeable for savers." It is now high time to end the zero interest rate policy.

Above all, more expensive energy has consumer prices in Germany let rise by 2,5 percent in May - so strong like it hasn't been for around nine and a half years. Some economists also consider a four to the decimal point in autumn to be possible for the inflation rate in autumn - then the effect of the VAT, which was temporarily lowered in the second half of 2020, becomes noticeable.

The ECB, on the other hand, has kept the key rate at zero percent since March 2016. Should it raise it, it would potentially benefit savers. In return, however, the euro countries would have to pay more money for their debt servicing, which highly indebted states such as Italy would pose great challenges. Loans, for example for buying an apartment or building a house, could also become more expensive.

Economically, expect higher inflation

The economist Volker Wieland also expects inflation to be well above the ECB's target of just under two percent in the coming months. »However, temporary effects can also have a lasting effect if monetary policy remains as loose as it is now for too long. That can be cause for concern, «said Wieland to the newspapers of the Funke media group.

The economist, who has been a member of the Council of Economic Experts since 2013, expects the ECB to have difficulties tightening its monetary policy. »The main reason is the sharp rise in national debt. The ECB has to reckon with strong political headwinds if it wants to stop bond purchases and raise central bank interest rates. "

In its March forecast, according to the newspaper report, the council of experts assumed inflation over the year of 2,1 percent for Germany and 1,6 percent for the euro area. Now the advisory body of the federal government expects higher numbers. "There are now signs of a somewhat faster economic recovery, so that the inflation forecast could also be higher," said Wieland.

The risk of a higher rate has "increased significantly". He assumes that the average inflation in Germany will be higher than in the euro area, as, among other things, the German economy is recovering faster from the pandemic.