Tuesday Jan 27, 2015 Search
Weather | Athens
13o C
7o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Germany's Schaeuble sees no deflation threat in Europe

By Noah Barkin & Gernot Heller

Recent turmoil in emerging markets will hit export-oriented European economies but there are no signs the bloc that shares the single currency is headed towards deflation, German Finance Minister Wolfgang Schaeuble said.

Speaking to Reuters as part of a series of interviews with top policymakers across the eurozone, Schaeuble signaled a readiness to help emerging market countries that have seen their currencies sink to multi-year lows in past weeks as part of a broad market sell-off.

"We will help the emerging markets, within the limits of our possibilities, to solve their problems just as they stood by us in past years," Schaeuble said, pointing to a meeting of G20 finance ministers in Australia later this month.

"The difficult situation in some emerging markets affects us of course. We are all dependent on exports, Germany more than other countries," he added.

But Schaeuble, who started his second term as finance minister in December, said he agreed with European Central Bank President Mario Draghi that falling prices were not a danger for the eurozone, despite a drop in the bloc's inflation rate to 0.7 percent last month and warnings from the International Monetary Fund that deflation is a potential risk.

"There is no deflation danger in Europe," Schaeuble said. "We understand deflation as a reluctance to spend in the anticipation of falling prices. And there are no signs of this."

In a wide-ranging interview, Schaeuble also played down the risks of last week's ruling by Germany's Constitutional Court on Draghi's bond-buying scheme.

The court decided to refer complaints against the so-called Outright Monetary Transactions (OMT) program to the European Court of Justice, but it also voiced concerns that the ECB went beyond its mandate with the scheme.

Although the OMT plan has never been used, it is widely credited with restoring confidence in the euro zone after years of crisis that had threatened to tear the 18-member bloc apart.

Some experts, including the head of Germany's ZEW think tank Clemens Fuest, have said the court decision severely blunts the OMT program.

Schaeuble dismissed those concerns, saying the details of the OMT were secondary to the broad message sent by the ECB and European governments that they would not let the euro zone break apart.

"I think the return of financial market confidence in the stability of the euro has been due not only, not even primarily, to the ECB's (OMT) announcement," Schaeuble said.

"When leaders of government on the one hand, and the central bank on the other, say they will do what is necessary, then financial markets need not worry."

Schaeuble also touched on a referendum in Switzerland at the weekend in which voters approved new limits to immigration from the European Union, saying fears about the free movement of people in Europe needed to be taken seriously.

But he played down the risks of a strong performance by populist, anti-immigration and euroskeptic parties in European Parliament elections in May, saying this would only push bigger mainstream parties to work more closely together.

"If we have stronger euroskeptic voices in the next European Parliament, then it will raise the pressure on everyone else to commit even more strongly to European integration, to react to this result and make Europe more efficient," he said.

Regardless of the outcome of the vote and despite strong resistance in other European capitals, Schaeuble said Germany would not drop its push for changes to the EU's Lisbon Treaty that it argues are necessary to ensure closer integration.

"I think we will have a discussion about this at the beginning of the term of the next European Parliament and European Commission, and I am optimistic we will get a solution," Schaeuble said, predicting progress in 2015. [Reuters]

ekathimerini.com , Tuesday February 11, 2014 (12:01)  
Europe stocks fall from seven-year high; Greek bonds drop
Greek uncertainty weighs on low-rated eurozone bonds
Consumer confidence in decline in Q4
Euro slide fuels hope of tourism growth
Death count rises to 11 in military jet crash at Spanish base
The death toll from the crash of a Greek F-16 at a Spanish military base during an elite NATO pilot training program rose to 11 Tuesday after one of the French airmen who suffered serious bu...
Three days of mourning declared over death of two Greek pilots in Spain
The Greek armed forces will observe three days of mourning following the death on Monday of two Hellenic Air Force pilots whose F-16 fighter jet crashed during NATO-led exercises in southeas...
Inside News
BASKETBALL
Basket League favorites survive challenges on the road
PAOK consolidated its position in the top three of the Basket League with a triumph at AGO Rethymnou on Saturday, while Olympiakos and Panathinaikos emerged victorious from their tough away ...
SOCCER
Olympiakos overcomes depleted OFI at Iraklio
Easy though it may seem, Olympiakoss 3-0 win at depleted OFI Crete was rather difficult on Saturday, but was enough to keep the Reds on top on Saturday, as they have maintained their two-po...
Inside Sports
COMMENTARY
Greece, where everyones a winner
Whether a tradition or simply a bad habit, we have trouble finding a loser in any electoral race, a party leader who will openly concede defeat without trying to mitigate it with excuses. Th...
EDITORIAL
Political faux pas
Democracies have rules and institutions that must be respected and served by all who represent them. Most people can appreciate that politicians who have worked hard for the past two-and-a-h...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Death count rises to 11 in military jet crash at Spanish base
2. Europe stocks fall from seven-year high; Greek bonds drop
3. Three days of mourning declared over death of two Greek pilots in Spain
4. Greek uncertainty weighs on low-rated eurozone bonds
5. Greek Elections 2015: Forming a government, Part 1 | LIVE
6. Basket League favorites survive challenges on the road
more news
Today
This Week
1. Greek Elections 2015: Forming a government, Part 1 | LIVE
2. Greece, where everyone's a winner
3. Political faux pas
4. Three days of mourning declared over death of two Greek pilots in Spain
5. Greek uncertainty weighs on low-rated eurozone bonds
6. Europe stocks fall from seven-year high; Greek bonds drop
Today
This Week
1. Greek Elections 2015 | LIVE
2. Greek Elections 2015 | LIVE
3. SYRIZA heads for historic victory but without majority
4. Greeks fork out nearly 5 pct of their incomes on telecom services
5. QE exclusion a de facto Grexit
6. Unsupervised voting
Advertiser Link
SMART WATER Project: Outputs and conclusions of the final conference
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2015, H KAΘHMEPINH All Rights Reserved.