Germany’s post-reunification situation was marked by high unit labour costs and high unemployment. To bring real wages down to a market clearing level, a period of wage moderation ensued. This, combined with the realisation that demographic developments would require greater private savings to ensure a comfortable retirement, has caused the saving rate of households to rise gradually over the last decade.
Since the announcement of our policy measures in June 2014, bank lending rates for euro area non-financial corporations have fallen by around 120 basis points and those for households by around 110 basis points. Rates on very small loans, which can be taken as a proxy for loans to small and medium-sized enterprises (SMEs), have declined by around 200 basis points.