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Schäuble: Austerity Is Essential To Solve Crisis

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The German Finance Minister, Wolfgang Schäuble, has warned that allowing debt-laden countries to increase their borrowing would be akin to giving alcohol to an alcoholic.

Speaking in Washington DC at the weekend, Mr Schäuble said: "It is my conviction that a strategy built on piling on more debt will stunt rather than stimulate growth in the long run. We will err if we assume that markets will tolerate debt levels as in the past."

According to Mr Schäuble, an influential minister in Angela Merkel's coalition government in Berlin: "The main reason for the 2008 crisis was too high deficits and too high debts ... You can't cure an alcoholic by giving him alcohol."

His comments, at a conference organised by the Institute of International Finance, constituted a firm repudiation of the advice from the head of the International Monetary Fund, Christine Lagarde, who argued last week that countries which had room to borrow in the international financial markets should do so in order to prop up collapsing demand in the global economy.

Mr Schäuble said: "It is essential to stick to our common commitments agreed by the G20 at the Toronto summit [in 2010] to make substantial progress on reducing our deficits until 2013 and stabilise public debt by mid-decade. Otherwise another crisis of confidence might be in the offing ... Consolidation efforts must not be postponed."

He's nearly got it the debts are too high and the only option is default, they are impossible to pay off.

And yet the rescue package is to create even more debt to solve the debt crisis. Instead of giving the alcohol to the alcoholic they are going to turn everyone else into one.

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  • 343 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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