ECB monetary easing hurts German savers but heals state finances

London

MANY Germans see the European Central Bank's (ECB) bond-buying scheme and interest rates cuts as subsidising indebted southern eurozone members at the expense of northern savers, but it has also transformed the finances of Germany's regions.

The central bank started cutting interest rates in 2008 to help the economy after the global financial crisis and gathered pace as a series of debt crises hit the eurozone in 2011 and 2012.

The monetary easing stepped up a gear when the ECB embarked on a trillion-euro bond-buying scheme in March 2015 which pushed borrowing costs even lower.

This punished German savers by driving interest rates to…