BERLIN (MNI) – German Finance Minister Wolfgang Schaeuble warned on
Tuesday that the Eurozone sovereign debt crisis has possibly not yet
reached its peak.
Speaking at a conference of the German Engineering Association
here, Schaeuble noted that some observers claim that the height of the
crisis has already been passed. “I’m not so sure about this,” he
cautioned.
Still, the minister assured that all Eurozone member states are
determined to hold monetary union together. The risks of failure of the
Eurozone “would be completely incalculable,” he warned.
Schaeuble insisted that member states have no alternative but to
become more competitive and to continue on a medium-term deficit
reduction path.
“We are on the right path but not yet as far as we should be,” the
minister remarked. He warned fellow member states not to loosen their
reform efforts because sovereign bond spreads have come down.
Monetary policy would be overburdened with keeping the currency
stable on its own, Schaeuble reasoned. “Too many in the world believe
central banks can do everything,” he said, noting that the mandate of
central banks is “strictly limited” because their decisions are not
democratically legitimated.
Turning to Greece, the minister said one has to wait for the next
report by the troika of the EU Commission, ECB and IMF before making any
final decisions. Schaeuble said he believed that it is possible to keep
Greece in the Eurozone. Europe will be strong enough to cope with the
Greek problem, he said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@mni-news.com
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