OVERVIEW in the evening/economy, central banks, politics

The most important events and reports on the economy, central banks and politics from the Dow Jones Newswires program

Consumer sentiment in the euro area is improving

Consumer confidence in the euro area improved in February. The index determined by the EU Commission rose by 0.6 to minus 15.5 points. Economists surveyed by Dow Jones Newswires had forecast a reading of minus 15.7. For the EU-27, the value improved by 0.4 points to minus 15.8. The final consumer confidence index reading for February will be released next week.

Mediation Committee meets to discuss dispute over the Growth Opportunities Act

The mediation committee of the Bundestag and Bundesrat began its deliberations on Wednesday evening. In particular, a solution is sought in the dispute over the Growth Opportunities Act. The traffic light government’s proposal provides for a series of reliefs for companies amounting to 3 billion euros per year. The Union only wants to agree to the project if the federal government reverses the gradual elimination of agricultural diesel subsidies for farmers.

Federal government lowers forecast for GDP growth in 2024 to 0.2% from 1.3%

The federal government sees the German economy in “difficult waters” and has significantly lowered its growth forecast for this year. Government spokesman Steffen Hebestreit said this after the Federal Cabinet meeting. The government only expects gross domestic product (GDP) to increase by 0.2 percent in 2024, significantly less than the 1.3 percent growth expected in October. Federal Minister of Economics Robert Habeck (Greens) will present the new forecast in the afternoon.

Ministry of Finance: Report shows need for economic turnaround

The Federal Ministry of Finance has seen the weak economic forecast in the new annual economic report as confirmation of the urgency of measures that strengthen competitiveness. “The annual economic report makes clear the need for an economic turnaround,” emphasized the House of Federal Finance Minister Christian Lindner (FDP) via the short message service and work incentives.

Habeck sees the German economy in “difficult waters” and calls for “reform boosters”

Federal Economics Minister Robert Habeck (Greens) sees the German economy in “difficult waters” and is calling for a “reform booster” for Germany. It had previously been announced that the federal government had significantly lowered its growth forecast for this year. It expects gross domestic product (GDP) to only increase by 0.2 percent in 2024, significantly less than the growth of 1.3 percent expected in October. For 2025, Habeck says he expects economic growth of “approximately” 1 percent.

Habeck: Delaying the Growth Opportunities Act is damaging to the location

Federal Economics Minister Robert Habeck (Greens) has called on the Union to quickly approve the Growth Opportunities Act. Habeck is critical of the long negotiations in the mediation committee between the Bundestag and the Bundesrat. “Delaying this damages the location,” said Habeck at a press conference. The volume is already at a very modest level.

Lindner: The development of inflation has become manageable

Federal Finance Minister Christian Lindner (FDP) classified the inflation development as “controllable” and called for an improvement in the economic framework. “The good news is that inflation is falling,” said Lindner in a government survey in the Bundestag. “With the interaction of the European Central Bank’s monetary policy and the federal government’s moderately restrictive fiscal policy, we have made great progress. I think we can say that the development of inflation has now become manageable.”

Bundestag initiates mandate for naval operations on the Red Sea

The Bundestag has initiated the mandate for the Bundeswehr to participate in the EU mission to protect merchant ships from attacks by the Houthi militia from Yemen. Parliament discussed a corresponding proposal from the federal government in a first reading on Wednesday afternoon. According to this, the Bundeswehr should be able to take part in the mission with up to 700 soldiers. The final vote is scheduled for Friday.

EU Corona recovery fund: Almost a third of the funds paid out at half-time

The payouts from the European Corona reconstruction fund are slow. As the EU Commission announced in a mid-term balance sheet, it has so far paid out almost 225 billion euros to the member states, less than a third of the available funds. The fund is endowed with a total of 800 billion euros.

EU accession negotiations no longer take place before the European elections

The European Union’s accession negotiations with Ukraine are still a long time coming. EU Commission President Ursula von der Leyen said she no longer expects the necessary negotiating framework for the talks to be available before the European elections from June 6th to 9th. “This will take some time,” she said. The EU will possibly be “ready at the beginning of summer”.

Ifo: Russia circumvents sanctions on Western goods via CIS countries and Türkiye

According to the Munich Ifo Institute, Russia circumvents a large part of the sanctions on Western goods via the CIS group of countries and Turkey. As the research institute said, Armenia, Kazakhstan, Uzbekistan, Kyrgyzstan and Turkey exported 50 times more goods to Russia that are critical to the Russian economy or important for the military industry in 2022 than they exported general goods to all destination countries in 2019.

Heavy fighting between Israel and Hamas across the Gaza Strip

Heavy fighting between the Israeli army and the radical Islamic Hamas continues unabated throughout the Gaza Strip. Eyewitnesses reported fighting in Khan Yunis in the south and in Seitun and Shejaiya, two neighborhoods of Gaza city in the north. AFP footage also showed Palestinians inspecting the ruins of a house after an airstrike on Rafah in the far south of the Gaza Strip.

Brazilian President Lula receives US Secretary of State Blinken

Amid a diplomatic crisis with Israel, Brazilian President Luiz Inácio Lula da Silva met with US Secretary of State Antony Blinken. Both politicians spoke for around 45 minutes in the presidential palace in the capital Brasília. They spoke briefly to reporters about the US presidential election in November, with Blinken noting how “polarized” the United States was. A press conference was not held.

+++ Economic data +++


US/Redbook: Retail sales first 2 weeks Feb +2.7% yoy

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(END) Dow Jones Newswires

February 21, 2024 1:00 p.m. ET (18:00 GMT)