BERLIN (MNI) – German Finance Minister Wolfgang Schaeuble said in a
newspaper interview published Sunday that the euro will stabilise again
following the current bout of depreciation.
“The foreign exchange rate drop [of the euro] over the past months
is certainly worrying, but the euro will stabilise again,” Schaeuble
told German weekly Bild am Sonntag (BamS).
“I hope that we won’t need any further rescue package,” he said.
The inflation risk in Germany over the short term “is not so big,”
the minister asserted. Over the medium term it will be crucial to lower
the country’s total public deficit to guard against inflation, he said.
Schaeuble acknowledged that it will be a difficult task for the
federal government to meet the country’s debt limitation rules, “but it
is also not impossible.” He did not rule out abolition of some tax
subsidies, in addition to spending cuts.
The German debt limitation rule stipulates that the structural
deficit of the federal budget must be no more than 0.35% of GDP starting
in 2016. From 2011 until 2016, federal net new borrowing must be
gradually brought in line with that ratio.
The structural deficit limit of the 16 states is set at 0.0% of GDP
starting in 2020. From 2011 until 2020 the states must gradually lower
their structural deficits to zero.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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