German Finance Minister Wolfgang Schaeuble said fighting unemployment in Europe will take time as he defended efforts to resolve the debt crisis, adding that letting the currency collapse would mean “catastrophe.”
Leaders of the 17-member single currency now turning to battle youth unemployment cannot allow the younger generation “to wait five years,” Schaeuble told a conference. He pointed to improving signals in crisis countries, saying that Portugal and Ireland will likely return to the market next year.
“Unemployment is always the late indicator,” Schaeuble told a gathering of Chancellor Angela Merkel’s Christian Democratic Union in Berlin. Joblessness “comes late during a worsening economy, but it goes late as well.”
Schaeuble said that as the European economy takes time to recover, competitiveness in Spain and a revival of Greece’s tourism industry indicate that Europe “is on the right path.”
He also defended the currency as essential for Germany’s interests as the CDU confronts a challenge from the anti-euro Alternative for Germany party, saying that the economic fallout from a euro collapse “would be nothing compared with 2009.”
“We would cause a grave economic catastrophe if we destroyed the euro, or factored in a destruction,” Schaeuble said. “That’s why we’re not going to do that.” [Bloomberg]