BERLIN (Reuters) - Germany will grow by a meagre 0.5 percent this year, the government said on Thursday, raising its forecast by just 0.1 percentage points as a lack of investment and weak exports continue to be a drag on Europe's largest economy. The German Economy Ministry kept its 2014 forecast for solid growth of 1.6 percent and said it was upbeat as the global economy begins to regain traction and crisis-stricken euro zone states make progress with their reforms.

President Francois Hollande said Friday that France supports Latvia adopting the euro in January to become the currency bloc's 18th member. "If the reports confirm Latvia's capacity to join the eurozone, and I don't doubt they will, I support the 2014 date," Hollande said in a joint appearance with Latvian Prime Minister Valdis Dombrovskis. Latvia submitted last month its formal request to join the eurozone on January 1, 2014, and the European Commission and European Central Bank are expected within weeks to render their verdicts whether the Baltic state is ready.

VIENNA (Reuters) - Austria's FMA markets watchdog expects the main pillars of the new European banking union to take effect as scheduled despite German reservations, senior FMA officials told reporters. Banking union aims to shore up the euro zone by breaking the "doom loop" between ailing banks and state finances. As a first step, the European Central Bank is to start supervising euro zone banks next year. Financial Market Authority co-head Helmut Ettl said plans were on track to have the ECB take on that role.

FRANKFURT (Reuters) - The European Central Bank could reduce interest rates further if economic data warrants it, ECB Governing Council member Jens Weidmann was quoted by the Wall Street Journal as saying on Wednesday, sending the euro sharply lower. The ECB decided to leave interest rates on hold at its April policy meeting, but ECB President Mario Draghi said the bank would "monitor very closely" all data and stand "ready to act" to boost the recession-hit euro zone.