German banks admit damage from mark rise

Click to follow
BONN (Reuter) - The Federation of German Banks yesterday admitted that Germany's economic prospects had worsened as a result of the recent turbulence on currency markets.

In its monthly report the federation said that the strong increase in the value of the mark against other European currencies could hit around a quarter of exports while making imports more competitive. 'The German economy still has something of a hard slog ahead of it,' the federation said.

It said considerable progress had been made in the economic reconstruction of eastern Germany since unification two years ago. But it added that western Germany's economy had weakened considerably, with industrial orders down, unemployment rising and persistent inflationary pressures.

'At present there is no appreciable stimulus for the west German economy either domestically or from abroad,' it said.

Senior politicians from Chancellor Helmut Kohl's coalition said yesterday that taxes might have to be raised in the next few years to pay the soaring bill for German unification.

Comments