April 12, 2024 (EIRNS)—As the devastating effect of deflationary monetary policy and high energy prices are unfolding in Europe, the European Central Bank (ECB) governing board met on April 11, and decided to leave rates unchanged. The interest rate on the main refinancing operations, and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.50%, 4.75% and 4.00% respectively. However, ECB head Christine Lagarde said that, though a minority wanted to cut the rates, they accepted the majority view to wait until June, provided that inflation stays under control. (Actually, signals from the commodity markets, where prices keep rising, suggest that this might not be the case through June.)
Meanwhile, due to high interest rates and inflation, the German real estate market is down by 19% in the first quarter of 2024, with the commercial sector performing worse than housing, according to an April 8 press release from specialist real estate firm Jones Lang LaSalle. In a city like Frankfurt, Germany’s financial center, major investors have hardly bought any offices or retail properties so far this year. From January through March, there were only eight transactions, the lowest number in 14 years. International investors have disappeared.
