Greek finance minister calls ECB talks ‘fruitful’

Greek Finance Minister Yanis Varoufakis said Wednesday that his meeting with European Central Bank (ECB) chief Mario Draghi in Frankfurt had been "fruitful" and gave him "a great deal of encouragement".

Greek finance minister calls ECB talks 'fruitful'
Yanis Varoufakis arriving at the ECB in Frankfurt on Wednesday. Photo: DPA

"We had a very fruitful discussion and exchange," Varoufakis told reporters after emerging from his meeting at the ECB's headquarters, which lasted just over an hour.

There was an "excellent line of communication, which gives me a great deal of encouragement for the future," the minister told reporters.

In the run-up to the meeting, a report in the Financial Times had suggested that Draghi would take a tough line with Varoufakis and could even block a key element in Athens' plans to renegotiate its bailout.

The minister said Draghi "was particularly helpful in outlining the mechanism by which the ECB supports eurozone member states including Greece".

The ECB chief had laid out the "constraints, the rules, the regulations, the process by which the relationship between Greece, the eurozone and, of course, the central bank must unfold," he said.

As for his government's own plans, "I had an opportunity to present to him our government's utter and unwavering determination that it can't possibly be business as usual for Greece," Varoufakis said.

"We need to end the malignancies that have afflicted the Greek economy in the past year."

The visit to Frankfurt was the latest on whistlestop European tours by Varoufakis and Greek Prime Minister Alexis Tsipras to drum up support for Athens' planned renegotiation of its €240 billion bailout.

Varoufakis has already taken his case to London and Rome, while Tsipras was scheduled to meet European Commission president Jean-Claude Juncker in Brussels on Wednesday before heading to Paris.

The Greek finance minister will have another tricky encounter Thursday, when he meets German counterpart Wolfgang Schäuble in Berlin in a key test of whether his proposals have any chance of being accepted by the EU's leading powers.

Varoufakis said he was "extremely eager" to meet Schäuble, whom he described as "an intellectual force behind the project of the EU".

SEE ALSO: Greek charm offensive to hit Berlin and Frankfurt

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Inflation rose in Germany in December: report

Inflation in Europe's largest economy Germany clambered higher in December, official data showed Friday, but remained short of the European Central Bank's target for the 19-nation eurozone.

Inflation rose in Germany in December: report
Prices in Germany are rising, but not as fast as they should be. Photo: Jens Büttner / zb / dpa
Price growth hit 1.5 percent year-on-year last month, statistics authority Destatis said, some 0.4 percentage points higher than in November.
And it reached the same level when measured using the Harmonised Index of Consumer Prices (HICP) yardstick preferred by the ECB.
But while German price growth was headed in the right direction, it was still well short of the ECB's just-below-two-percent goal. Over the full year 2019, inflation averaged just 1.4 percent.
“There is little sign of sustained growing price pressure that could prompt the ECB to rethink its ultra-expansive monetary policy,” said economist Uwe Burkert of LBBW bank.
Here's a graph put together by the German newswire DPA, showing how the inflation rate in Germany has fluctuated between 2008 and 2019. 
The ECB has set interest rates at historic lows, granted hundreds of billions of euros in cheap loans to banks, and bought more than 2.6 trillion euros ($2.9 trillion) of bonds in efforts to keep credit flowing to the economy, stoking growth and inflation.
But it has fallen short of its eurozone-wide price growth target for years, predicting last month it would inch up to just 1.6 percent by 2022.
Economists have pointed to both uncertainty over political events, like trade wars and Brexit, and long-term developments like ageing populations as possible reasons for sluggish growth and inflation.
Under new chief Christine Lagarde, the ECB plans to launch a wide-ranging “strategic review” this year, its first since 2003, that could adjust its tools or even reexamine the inflation target itself.
In the meantime, she has urged countries — like Germany — with sound government finances to lift spending in hopes of juicing the economy.