• Germany's news in English
Germany sets collision course with US over global stimulus
G20 finance ministers are meeting in Shanghai. Photo: DPA

Germany sets collision course with US over global stimulus

DPA/The Local · 26 Feb 2016, 08:33

Published: 26 Feb 2016 08:33 GMT+01:00

Facebook Twitter Google+ reddit

Government attempts to boost their economies with monetary loosening could be "counterproductive", Wolfgang Schäuble told a conference ahead of a G20 finance ministers meeting in Shanghai.

Central bankers have come under pressure ahead of the meeting of the world's top economies to unleash fresh monetary firepower to help stimulate sagging growth and reassure investors.

Japan has already adopted negative interest rates, the European Central Bank has embarked on a huge quantitative easing programme, and the US Federal Reserve has signalled possible delays to interest rate rises.

Schäuble said that "thinking about further stimulus just distracts from the real task at hand," adding that Berlin does "not agree on a G20 fiscal stimulus package".

"Monetary policy is extremely accommodating to the point that it may even be counterproductive in terms of negative side effects," he said.

"Fiscal as well as monetary policies have reached their limits, if you want the real economy to grow there are no shortcuts without reforms."

His comments contrasted with US Treasury Secretary Jacob Lew, who said earlier this week that fiscal and monetary policy were "important tools".

"When used together, they're powerful. And that's the message we bring," he told Bloomberg Television.

"It means that in countries that are big economies, regions that have big economies, they need to use policy tools."

As the European Union's largest and richest country Germany, often has different economic priorities than the other members.

Schäuble, known for being frank, has previously openly criticised the ECB for being too accommodative.

Story continues below…

The use of spending over the last two decades to mitigate against economic crisis no longer appeared to work, he said Friday, adding that debt levels were too high while growth remained too low.

"The debt-financed growth model has reached its limits," he said. "If we continue on this path we no longer need to watch television, the walking dead will overwhelm us, particularly in finance and construction."

He did not specify in which countries such zombie enterprises existed - although they are a perennial issue in China.

For more news from Germany, join us on Facebook and Twitter.

DPA/The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Parents who don't get nursery spot for kid entitled to pay
Photo: DPA

The Federal Court of Justice (BGH) ruled on Thursday that parents whose children don't receive placements in nursery care are entitled to compensation.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd