BUNDESBANK

The European Central Bank is set to cut interest rates again by 25 basis points on Thursday, just days before the US Federal Reserve (Fed) opens its own monetary policy easing cycle.

Preliminary data from the European statistical office Eurostat reveals that the Eurozone and the European Union managed to maintain economic stability in the fourth quarter of 2023, bouncing back from a 0.1% contraction in GDP during the previous quarter.

Germany's economy shrank at a smaller rate in the fourth quarter of last year than originally thought, despite the blows leveled by supply chain woes and the pandemic, official data showed on Feb. 25.

Gross domestic product in Europe's top economy slipped 0.3 percent in the last three months of 2021 compared to the previous quarter, the federal statistics office Destatis said.

The Bundesbank has said the latest wave of the coronavirus pandemic risked pushing the German economy - Europe's largest - into a technical recession before staging a recovery from the second quarter.

Even when (not if) coronavirus pandemic has passed, Europe could find the most damaging economic legacy is not the vast piles of government debt but the hundreds of billion euros in liabilities that have landed on companies.

The European Central Bank (ECB) is drafting contingency plans to carry out its multi-trillion bond-buying program without the Bundesbank in case Germany's top court forces the main participant in the scheme to quit, four sources told Reuters.

A legal wrangle over the European Central Bank's bond-purchasing program will help focus minds on the need for closer European integration, Greek central bank chief Yannis Stournaras said on Tuesday.

The European Union's top court said on Friday it alone has the power to decide whether EU bodies are breaching the bloc's rules, in a rebuke to Germany's highest court, which this week rejected its judgment approving the ECB's trillion-euro bond purchases.

The European Central Bank pushed back on Thursday at a German court's attempt to curb its power to buy government bonds, saying it was "more determined than ever" to pull the eurozone out of its worst economic crisis in nearly a century.

Germany's highest court on Tuesday gave the European Central Bank (ECB) three months to justify bond purchases under its flagship stimulus program or lose the Bundesbank as a participant, raising questions about both the scheme and the euro's future.