“Won’t the ECB lower rates on such news?”

Probably Oliver. But for hardened German economy watchers this is hardly news (I mean I myself was forecasting something not that far from what we were seeing back in June), and thus the ECB has hardly been proactive here.

Secondly, it is not clear at this point that a simple rate cut will work - as we can see from the kind of measures Merkel is considering, we have a credit crunch on our hands, and even worse, a credit crunch among our best customers, so obviously the ECB need to get over to some form of Quantitative Easing as quickly as possible, but we are light years away from that at the ECB at this point, so grin and bear it will have to be the message for Germany in 2009, though some relief may finally come in 2010, when the ECB can realistically be expected to have finally caught up.