Bundesbank Profits Hit by Strong Euro

The sharp rise in the euro at the end of last year has whittled down the Bundesbank's 2004 annual profit to almost zero, a central bank spokesman said on Thursday. Earlier, regional daily Passauer Neue Presse had quoted government sources as saying that the euro's surge to record highs against the dollar at the end of last year meant the central bank would have to make heavy writedowns against its dollar reserves, effectively wiping out its 2004 annual profit. That spells bad news for Germany's severely straitened public finances.German Finance Minister Hans Eichel had been pencilling in a Bundesbank profit of around €2 billion ($2.6 billion) for 2004, which he could use for the 2005 budget. The Bundesbank is scheduled to publish its 2004 annual accounts in mid-March.