Sunday, October 12, 2014

Schäuble: The economy is doing better than its reputation – FAZ – Frankfurter Allgemeine Zeitung

Schäuble: The economy is doing better than its reputation – FAZ – Frankfurter Allgemeine Zeitung



finance ministers and central bankers from around the world have struggled at the fall meeting of the International Monetary Fund (IMF) and World Bank to find ways to revive the global economy. The IMF’s steering committee said on Saturday in Washington for a combination of economic programs and structural reforms. German Finance Minister Wolfgang Schaeuble warned however against too much pessimism. On austerity in the euro zone, he maintains, provides in Germany but scope for investment.


The Steering Committee suggested in its final communiqué of the Member States of the Monetary Fund “bold and ambitious measures” to promote growth of. Strengthening the demand for it is just as necessary as reforms and sustainable fiscal policy. In the current economic outlook, the IMF had lowered its forecast for global growth this year to 3.3 percent – that is 0.1 percentage points less than in July and 0.4 percentage points less than in the prognosis of April


Schäuble stressed that “there is no reason the world economy to speak in any crisis”. As before, a will listed “fairly satisfactory growth”. For example, “geopolitical risks” by the Ukraine crisis and the situation in the Middle East Although had increased, but “dramatic speculation” about a possible slump in global economic growth are misplaced.


This year’s growth in the euro zone, the IMF corrected by 0.3 percentage points to 0.8 percent down; the Steering Committee complained in its communiqué the “timid” economic recovery in the euro zone. The US Treasury Secretary Jack Lew called on European leaders, “realign” its policy and to strengthen the demand. The euro zone need a “proper mix” of economic stimulus packages, monetary policy measures and structural reforms, it said in Lew’s statement to the Steering Committee. Also the Vice President of the Federal Reserve, Stanley Fischer gave pessimistic. “If that growth abroad is weaker, which could lead to the exit from the loose monetary policy is taking longer,” he said.


Schäuble presented the Panel noted, however, that the euro area have made “significant progress” in addressing the crisis. In the financial markets’ confidence in the monetary union had returned, many crisis countries had brought the recession. At the same time Schäuble warned against “complacency”. The currency area must tread the “path of growth-friendly fiscal consolidation” on.


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In his closing press conference of the Minister of Finance stated that Europe was aware of his “responsibility” for the world economy and “intensively” working on a strengthening of growth. Given the economic downturn it was “more important” to stick to the course of reform and “promote structural things” the. Bundesbank chief Jens Weidmann warned to call “reflex” stimulus programs. Also Schäuble had always rejected in the past few days demands to allow increased government investment in the euro zone at the expense of budget consolidation.


The Finance Minister reiterated on Saturday that Germany should strengthen its “efforts for more investments in the public and private sectors”. Berlin would use “every possible discretion” to reallocate funds in the federal budget accordingly. The investment could be increased but not “overnight” and would also flow not only in infrastructure projects. The German transport network is not the “worst in the world,” Schaeuble said, speaking on the other hand for higher expenses for research, education and innovation.


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Schäuble: The economy is doing better than its reputation


finance ministers and central bank chiefs are worried about the global economy and call for new stimulus programs. Finance Minister Schäuble sees it differently: He thinks it is not running so bad.

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