BERLIN (MNI) – German Finance Minister Wolfgang Schaeuble warned
Friday that the global economy is at a critical point and predicted
difficult discussions at the G7 finance minister and central bank
governor meeting in Marseille this weekend.
The minister urged governments around the globe to continue on a
measured budget consolidation course.
“The development of the global economy is at a critical point,”
Schaeuble said in a speech in the German parliament. “We will have
difficult debates” at the G7 meeting, he said.
Given Germany’s export-dependency, the global economic slowing
“will also impact on Germany,” the minister acknowledged. Still, he
vowed that “we will continue on our course of reducing our too elevated
[public] debt.”
Schaeuble reckoned that “the main cause of the [global] crisis is
the excess of public debt.” Thus, “if we want to fight the crisis …
then the course of a measured deficit reduction must be continued in
Germany, in Europe and in the world,” he insisted.
“To fight the crisis by the means of monetary policy, by increasing
money supply or by increasing public debt would be precisely the wrong
way,” Schaeuble argued. “It would only worsen the problems, not solve
them.”
Earlier today, the German Economics Ministry argued in a report
that “demands for new debt-financed programs, as they are partly raised
internationally, are counterproductive in the environment of the current
confidence crisis in many debtor countries.”
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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