He may be German, but he just might turn out to be right.
German Finance Minister Wolfgang Schaeuble in a Bloomberg interview at the Medef business leaders' conference near Paris was quoted as saying he agrees "100 percent" with ECB President Mario Draghi about balancing monetary policy with structural reforms.
‘Monetary policy can only buy time,’’ Schaeuble said in the interview yesterday. “Liquidity in markets is not too low, it’s even too high. Therefore I think monetary policy has come to the end of its instruments and therefore what we urgently need is investments, regaining confidence by investors, by markets, by consumers.”
A lot of people won't like this because it's about staying the course against structural reform at a time when many are asking for some slack when it comes to meeting EU deadlines on debt levels.
“I don’t think ECB monetary policy has the instruments to fight deflation, to be quite frank,” Schaeuble said. Domestic demand is driving German growth “because we have high confidence of consumers, investors.”
“And the main reason why we have such a high confidence is they think our public budgets are sustainable, we will stick to what we have promised and we stick with investment,” he said.
The absence of inflation in the EU zone continues to plaque central bankers. Inflation slowed this month in the EU, according to recent data, with consumer prices rising 0.3 percent from a year earlier, its lowest rise since late 2009. The euro trading at an 11 month low remains little changed at just over $1.318.
Schaeuble took note of French President Francois Hollande's mover to change his cabinet to more pro-business members, saying "It's a good decision."
Perhaps the most telling quote came when Schaeuble was asked about the course France would take. "...my French colleagues will do what's needed to enhance our competitiveness in line with the rules that have been agreed again and again."
He concluded his comments with: “It’s very important that we all know in Europe -- every member state -- that we have to stick to structural reforms and enhance competitiveness, even in Germany,” he said. “We are fine actually, but if we were not to continue to enhance our competitiveness in coming years we would lose our position.”
Slice, dice the bratwurst anyway you want, but doesn't appear to be much culinary digesting room there.
t. man hatter
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