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Trends-Tendances - Belgium | Thursday, November 20, 2014

Negative interest rates force consumption

Commerzbank on Wednesday became the first major German bank to announce that it would introduce negative interest rates on corporate deposits. Thuringia's Skatbank has also been charging its corporate clients a penalty interest of 0.25 percent on their deposits. The business magazine Trends fears that it won't be long before private customers are charged interest on their savings too: "It's true that at the moment only businesses and investment funds are being discouraged from putting their money into deposits. But tomorrow, who knows, maybe private savers will be next in line? In fact that's the direction we're slowly moving in, because in Belgium the banks have once again cut the interest on savings accounts. We're fast approaching zero percent interest! ... All of this is helping to force citizens to consume rather than to save, even if they don't want to. And because we're in a democracy, measures that target people's wallets are the only way to force them to do what they don't want to do. But some are questioning whether that is still democracy."

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