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German FinMin Schauble opposes G20 fiscal stimulus package

German Finance Minister Wolfgang Schauble
Axel Schmidt | Reuters
German Finance Minister Wolfgang Schauble

Germany's Minister of Finance Wolfgang Schaeuble said on Friday that the expansive fiscal and monetary policies implemented by governments to spur growth might have laid the foundation of the next economic crisis.

Those debt-financed fiscal policies and accommodative monetary policies had been only moderately successful in promoting growth, with public and private debt levels in the world now too high, Schaeuble said.

"Fiscal as well as monetary policies have reached their limits. If you want the real economy to grow there are no shortcuts which avoid reforms," Schaeuble said.

"Talking about further stimulus just distracts from the real tasks at hand."

"We, therefore, do not agree on a G20 fiscal stimulus package as some argue in case outlook risks materialise."

"The debt-financed growth model has reached its limits. It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy".

Schaeuble was speaking at a conference held by the Institute of International Finance in Shanghai in conjunction with a G20 meeting of central bank governors and finance ministers.

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