Europe German savers need not reckon with negative interest rates: Scholz

German savers need not reckon with negative interest rates: Scholz

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German Finance Minister Olaf Scholz

German Finance Minister Olaf Scholz on Thursday sought to calm savers worried that the ever-lengthening period of low interest rates in the euro zone could see them paying negative interest on their deposits.

The European Central Bank is set to unveil fresh stimulus measures on Thursday to prop up the ailing euro zone economy.

Hours before the ECB’s monetary policy meeting, Scholz said that savers need not reckon with negative interest rates “across the board.

“Most contracts that customers have with their banks do not currently allow such penalty rates, so the problem is not acute,” Scholz said. “Banks’ boards are wise enough to grasp what they would trigger with such penalty rates.

“I don’t think private customers in Germany need to reckon with negative interest rates across the board. We are monitoring the situation and are considering our options to act,” he added.

With other major central banks easing monetary policy, Germany at risk of falling into recession and inflation expectations sliding, ECB President Mario Draghi has all but promised more support, putting all of the bank’s remaining tools in play.

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