The Schaeuble rekindled the debate on interest rates in view of Draghi visit to Berlin
German Finance Minister Wolfgang Schaeuble today called for urgent make structural reforms to stimulate growth and to end the era of low interest rates, a day before MPs summon the President of the ECB Mario Draghi to loose monetary policy.
His comments reflect the revival of tension between the largest economy in Europe and the central bank of the eurozone, which has progressed to aggressive rate cuts in recent years and has channeled over a trillion. euro into the economy through asset purchases.
But with the growth in the eurozone to be moderate and inflation barely above zero, far below the target levels close to 2%, the ECB has little to show for its efforts, and critics argue that monetary policy has reached its limits.
In an article hosted on conservative German newspaper Frankfurter Allgemeine Zeitung, Schaeuble says that the interest rates are very low and are a cause of serious and reasonable concern.
"We can not let this phase of low interest rates behind us only if we have more sustainable growth in Europe," said Schaeuble. "We will not achieve this if we continue to move on old paths with new money, but only if we change course."
They need more structural reforms in Europe and governments must start to reduce "avastakta high debts" them to make them more resistant to external shocks, Schaeuble said.
German Finance Minister Wolfgang Schaeuble today called for urgent make structural reforms to stimulate growth and to end the era of low interest rates, a day before MPs summon the President of the ECB Mario Draghi to loose monetary policy.
His comments reflect the revival of tension between the largest economy in Europe and the central bank of the eurozone, which has progressed to aggressive rate cuts in recent years and has channeled over a trillion. euro into the economy through asset purchases.
But with the growth in the eurozone to be moderate and inflation barely above zero, far below the target levels close to 2%, the ECB has little to show for its efforts, and critics argue that monetary policy has reached its limits.
In an article hosted on conservative German newspaper Frankfurter Allgemeine Zeitung, Schaeuble says that the interest rates are very low and are a cause of serious and reasonable concern.
"We can not let this phase of low interest rates behind us only if we have more sustainable growth in Europe," said Schaeuble. "We will not achieve this if we continue to move on old paths with new money, but only if we change course."
They need more structural reforms in Europe and governments must start to reduce "avastakta high debts" them to make them more resistant to external shocks, Schaeuble said.
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