Germany's central bank has warned the euro crisis is not over and more reforms are needed by governments to get on top of it. The Bundesbank reported a significant strengthening of its risk buffer.
German Bundesbank President Jens Weidmann on Tuesday urged eurozone governments to tackle the roots of the protracted debt crisis with bold reforms. "The crisis is not over despite the recent calm on financial markets," Weidmann told reporters in Frankfurt.
The central bank chief added he sensed a big deal of uncertainty about restructuring endeavors in Italy and Cyprus, but also expressed doubts about the French drive towards budget consolidation. "The reform course in France seems to have floundered," Weidmann commented during a presentation of the bank's 2012 earnings report.
The report showed the Bundesbank increased its annual surplus by 21 million euros ($27.3 million) to 664 million euros last year. But the figure was less than half of what German Finance Minister Wolfgang Schäuble had been hoping for.
Win some, lose some?
Bundesbank chief Jens Weidman explained it increased its risk buffers by 6.7 billion euros to a total of 14.4 billion euros, meaning that transfers to the federal government remained at a relatively low level for the second straight year despite significantly higher interest rate income in 2012.
Berlin was expected to pass some of the Bundesbank profit on to Greece in line with an agreement reached among eurozone finance ministers and the International Monetary Fund (IMF).
Although precise figures were not given on Tuesday, the Bundesbank generated a great deal of its 11-billion-euro interest income from Greek bond holdings, with some resources to go back to Athens to help with the country's debt servicing.
hg/jlw (dpa, Reuters)