Bershidsky on Europe: More Jaw-Jaw at ECB

Here's today's look at some of the top stories on markets and politics in Europe.

Here's today's look at some of the top stories on markets and politics in Europe.

ECB says major stimulus under discussion .

European Central Bank President Mario Draghi did it again. At their policy meeting on Thursday, the bank's governors did not change its 0.25 percent main interest rate or make the deposit rate negative, but Draghi made a thunderous verbal intervention that succeeded in weakening the euro's exchange rate and lowering yields on the bonds of southern European countries. "We don't exclude further monetary-policy easing," Draghi said, adding that the ECB's 24-member board was "unanimous in its commitment" to use "unconventional instruments" if inflation stays much lower than the ECB's target of 2 percent. The markets heard a ratcheting-up of rhetoric in favor of some kind of quantitative easing, and Draghi achieved the desired effect without actually doing anything. The effect, however, can only be short-lived without action, which Draghi has avoided for months as the euro strengthened and inflation receded toward zero.

German factory orders signal faster growth.

Factory orders in Germany increased 0.6 percent month-on-month in February, much more than the 0.2 percent predicted by most analysts. January order growth, however, was revised to 0.1 percent from 1.2 percent. These numbers, no matter how tiny and shaky, show that the German economy grew in the first quarter, and the growth may have even been more substantial than the 0.4 percent recorded in the last three months of 2013. The snail-paced recovery in Europe continues as its economic flagship advances. It is a boring story but a better one than in previous years, and that is already cause for celebration.

Another 18 million e-mail accounts hacked in Germany.

Prosecutors in the north German city of Verden discovered a trove of 18 million stolen email-addresses and passwords, which were being used to send spam and hack into e-commerce accounts. This is the second such collection of stolen mailboxes discovered in Germany this year: The previous one, found by Verden prosecutors in January, included 16 million addresses. The finds potentially mean that huge previously unknown networks of malware-infected computers, or botnets, have been run from Germany to do all sorts of nasty things. Apart from helping people find out whether their email has been compromised, the German authorities need to take steps to disclose the general picture of which the two finds are only parts.

Fitch rewards Lithuania for euro accession moves.

The rating agency Fitch upgraded its outlook on Lithuania from stable to positive. The Baltic nation, rated BBB+ by the agency, is working toward inclusion in the euro area, and Fitch expects the European Central Bank and the European Commission to give a passing grade to its preparations, opening the way for Lithuania to adopt the euro from January 1, 2015. Despite the eurozone's many problems, countries still want to join it. Lithuania's neighbor Latvia dropped its currency in favor of the euro at the beginning of this year. Both countries, nearly bankrupted by the 2008 financial crisis, have muddled through without any major aid, and Fitch now expects Lithuania's real gross domestic product to grow 3.8 percent a year in 2014 and 2015, with the fiscal deficit continuing to shrink - to 2.2 percent this year and 1.7 percent in 2015. The small Baltic countries are worthy of respect for their dogged efforts to be good Europeans against all odds.

Erdogan pushes for interest rate cut.

Encouraged by his AK party's confident victory in somewhat suspect local elections last Sunday, Turkish Prime Minister Recep Tayyip Erdogan called on the country's central bank to lower interest rates, which it drastically increased last year to shore up the lira amid the emerging markets currency crisis. The lira has been strengthening recently, and Erdogan, who almost certainly intends to run for president in the fall, believes easier liquidity could boost the economy, which would give him some help at the polls. If Erdogan manages to consolidate his power, high interest rates will not be necessary to prop up the national currency: As far as investors are concerned, political stability is more important.

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