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German Finance Minister urges reduction of high global debt levels

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http://uk.reuters.com/article/uk-germany-schaeuble-idUKKBN1352EM

Quote

German Finance Minister Wolfgang Schaeuble on Thursday urged continued implementation of steps taken to shore up banks after the 2008 financial crisis, and said debt levels should be lowered globally to strengthen the resilience of economies.

"In truth, we will have to work harder, slowly, carefully, to reduce the much-too-high public and private debt levels around the world," Schaeuble told a banking conference. "Only through such a reduction will we be able to improve the resilience of our economies against shocks and crises."

Global debt levels were now at the highest levels since World War Two, he said.

Schaeuble said he hoped interest rates would eventually increase, and said the high liquidity rates resulting from the loose monetary policy of all large central banks had allowed many countries to postpone urgently needed reforms.

How do you lower debt levels, when it's debt driving GDP growth?

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2 minutes ago, thecrashingisles said:

Wolfgang Schaueble came to that conclusion about 60 years ago.

Ta.  I seem to have strayed from off topic to the serious debate forum :)  care to enlighten me with a link or two as I'm out of my depth with this one 

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Isn't that at least partly because Germany already has relatively low debt levels relative to GDP.  It probably relates to Deutsche Bank as well.

That doesn't mean to say that he doesn't have a point on levels of debt.

As far as I'm aware there was a push to delever by some countries soon after the start of the crash but apparently it hasn't gone very far - some would say quite the opposite.

 

 

2011  http://www.mckinsey.com/global-themes/employment-and-growth/debt-and-deleveraging-the-global-credit-bubble-update

2012  http://www.mckinsey.com/global-themes/employment-and-growth/uneven-progress-on-the-path-to-growth

2015  http://www.mckinsey.com/global-themes/employment-and-growth/debt-and-not-much-deleveraging

 

 

Blimey the start of the crash was nearly 10 years ago and they still haven't got to grips with it.

Edited by billybong

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A lot of that debt should never have been created in the first place - and paying it off rather than writing it off just transfers even more wealth to the elite. It 'ain't gonna happen. The pitchforks are out.

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20 minutes ago, TheWormIsTurning said:

This blokes been talking out of both sides of his mouth for a long time.

Its his nation banking industry that has destroyed the lives of many Greeks due to getting the taxpayer to repay the feckless lending of German banks

Exactly. So is he suggesting (1) the Greek government accelerates it's repayment schedule (2) Germany exercises debt forgiveness (3) Greece just plain defaults and leaves the eurozone. 

 

Who knows. He needs to recognise that Germany are the villains in this. But he won't.

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4 hours ago, TheWormIsTurning said:

This blokes been talking out of both sides of his mouth for a long time.

Its his nation banking industry that has destroyed the lives of many Greeks due to getting the taxpayer to repay the feckless lending of German banks

The problem is, on one level he is a serious German conservative with a natural aversion to debt (for good reason).

 

But he also enjoys holding high political office, so he has to put up with the reality of being in s Europe up to its eyeballs on debt, so also has to speak (relatively) encouragingly about the situation.

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