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German Industry Pleads With E C B Not To Hike

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German industry begs ECB not to raise rates

By Ambrose Evans-Pritchard
Last Updated: 12:20pm BST 23/08/2007
German industry has appealed to the European Central Bank to cancel a rise in interest rates next month, warning that the credit crunch risks triggering a worldwide economic downturn.
The powerful German Chamber of Industry and Commerce (DIHK) said banks had abruptly tightened lending standards and sharply raised the cost of borrowing for smaller companies.
"What we are seeing in the credit markets is likely to have a major effect, damping economic dynamism in coming months, not just in Germany but across the world," said Axel Nitschke, the group's chief economist....../
Alexander Stuhlmann, chief executive of WestLB, rattled markets on Tuesday with a blunt warning that the German banking system faced "huge problems" and was in a "not uncritical situation"...../
Mr Trichet has already clashed openly with French president Nicolas Sarkozy over monetary tightening, which has caused France's property boom to stall.
Paris holds the ECB responsible for the super-strong euro
, now trading at over $1.35 to the US dollar.

The irrational exuberance going on in the SMs after the credit crunch corrections does seem to be, well, irrational. Great Crash 2 is unwinding and many think a quick 10% down and a rebound back to normal is all there is. German industry seems to know better.

Edited by Realistbear

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