The most important economic and political news from the Dow Jones Newswires weekend programme.
Lagarde: Fighting inflation could become more difficult
According to the ECB President, central banks could Christine Lagarde more difficulties in fighting inflation due to changed economic conditions such as climate change, the energy transition and a realignment of supply chains. “We’re likely to see more supply-side shocks,” Lagarde said at the Jackson Hole monetary policy symposium. A successful one in these times of upheaval monetary policy must, according to the ECB President, have three characteristics: clarity, flexibility and humility.
Fed/Mester: More first rate hikethen waiting for a while
Fighting inflation will likely require one more rate hike in the US, followed by a period on hold. Cleveland Federal Reserve Bank President Loretta Mester said on Saturday that the Fed’s next and possibly last rate hike “doesn’t necessarily have to be in September, but I think this year,” she said. She may also reconsider her earlier view , after which rate cuts could begin in late 2024.
Before the cabinet meeting in Meseberg, pressure is growing on the government
Before the cabinet meeting in Meseberg, the pressure on the government to deliver results is growing. While trade unions and business associations urged the federal government to remain united at the weekend, Justice Minister Marco Buschmann (FDP) called for the topic of economic growth to be given priority at the meeting. Chancellor Olaf Scholz (SPD) meanwhile assured that there would be a solution in the dispute over basic child security “by next week”.
Scholz sees Germany in a good position despite the weakening economy
Chancellor Olaf Scholz (SPD) sees Germany well positioned for the future despite the currently weak economic situation. Germany has “the best prerequisites for us to play in the top league technologically in ten, 20 and 30 years,” said Scholz in an interview with the newspapers of the Bayern media group (Saturday editions). “We must not badmouth Germany as a business location,” he said. Germany “continues to have good economic prospects”.
Merz: “Insane bureaucracy” must be stopped
CDU leader Friedrich Merz has blamed the federal government for overburdening the country with too much bureaucracy and too many specifications. “We have to secure the freedom of our country and we have to maintain the prosperity of our country,” said Merz on Sunday in the ARD summer interview. There are three central challenges for this. “The first is that we have to stop this insane bureaucracy in this country and, if possible, push it back.” Neither the heating law planned by the coalition nor the cannabis law should be passed, said Merz. In general, all laws would have to be checked “as to what they trigger in terms of bureaucracy. Furthermore, it is about reducing energy prices, “especially through taxes and levies that the state levies.” It makes no sense to subsidize energy and at the same time rely on it Raising taxes Last but not least, Merz named the government’s climate policy as a major challenge: “We have to understand climate policy, energy policy and economic policy as a unit,” he said.
Economic sage Truger calls for a move away from the debt brake
The economist Achim Truger has called on the federal government to give up the debt brake in view of the weak growth in the German economy. “The crisis must not be exacerbated by a restrictive financial policy. General spending cuts are counterproductive. Instead, public investment should be strengthened. Budget consolidation can wait,” said the member of the German government’s Economic Advisory Council.
Russian investigators: DNA test confirms death of Wagner boss Prigozhin
Four days after a private plane crashed in Russia, the death of mercenary leader Yevgeny Prigozhin was confirmed by DNA tests, according to Russian investigators. The Russian investigative committee said on Sunday that all ten people who died in the crash were identified during the genetic tests. These are the people named on the passenger list of the flight. According to the authorities, Prigozhin was on the list, as well as his deputy Dmitri Utkin. The investigative committee did not initially provide any further information. The investigators also did not comment on the traces examined.
Lawyers for Gershkovich are appealing the sentence extension
Lawyers for jailed Wall Street Journal reporter Evan Gershkovich have appealed a Moscow court’s decision to extend his pre-trial detention until November 30. Gershkovich, a 31-year-old American citizen accredited by Russian authorities as a foreign correspondent, was arrested on March 29 while conducting an investigation. The Russian secret service FSB accuses him of espionage, an accusation that he, the Wall Street Journal and the US government vehemently deny. If the recent extension stands, he will be behind bars for at least eight months before a trial begins. The Russian prosecutor’s office has not yet announced when a trial will take place.
Attack on railway communications network in Poland causes disruption
The secret service in Poland has launched an investigation into an attack on the Deutsche Bahn communications network. Unknown attackers manipulated radio traffic on Saturday night and partially “destabilized” rail traffic in the north-west of the country, intelligence spokesman Stanislaw Zaryn told the Polish news agency PAP on Saturday. The perpetrators therefore sent out a stop signal. About 20 trains then stopped or were delayed.
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(END) Dow Jones Newswires
August 27, 2023 12:45 ET (16:45 GMT)