German minister sees 3% GDP decline in worst-case

German economy minister Glos says his ministry’s internal projection of a 3% GDP decline next year (mentioned here on Monday) is a worst case, not the base-case scenario. If necessary the government should counter the economic crisis by allowing higher deficits. Most government comments to date have shown a reluctance to breach the EU Growth and Stability Pact.

EUR/USD has dipped back to the 1.4325 area after a midday rally toward 1.4400.