Monday

23rd Sep 2019

Schaeuble rebukes IMF boss on eurozone debt

International Monetary Fund (IMF) boss Christine Lagarde and German finance minister Wolfgang Schaeuble went on collision course on Thursday (11 October) on the subject of eurozone debt and deficits.

Speaking at TV debate in the IMF's annual meeting in Tokyo, Lagarde said that countries should not be obliged to keep to ambitious deficit reduction targets if their economies remained stagnant, adding that higher public spending and tax cuts could be used as stimulus measures.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

Schaeuble hit back, saying Lagarde is contradicting the IMF's stance on austerity.

The fund had warned "time and again" that Western economies needed to prioritise debt reduction, he said.

"When there is a certain medium-term goal, it doesn't build confidence if one starts going in a different direction," he added.

The IMF chief at a separate press conference earlier in the day had struck a different tone, describing runaway government debt levels as the greatest problem facing western economies, commenting that they are at "wartime levels." 

"Without growth, the future of the global economy is in jeopardy, and perhaps the greatest roadblock will be the huge legacy of public debt," she had said.

Meanwhile, in another move likely to rile Berlin, Lagarde indicated the Fund is prepared to give debt-ridden Greece an extra two years to push through deficit reduction plans aimed at bringing the country's debt mountain, which currently stands at around 160 per cent of GDP, under control.

"Sometimes it is better to have more time," she said.

Berlin is coming under increasing pressure to take a more flexible approach to bailouts as the eurozone's economic woes deepen.

Earlier this week the IMF cut its growth projections for the eurozone, which it said would expand by 0.2 per cent in 2013. It also confirmed that the 17 eurozone economies would contract by 0.4 per cent in 2012.

The economic pain remains most acute in the five EU countries receiving emergency funding, with Greece, Portugal and Spain in particular difficulty.

The eurozone debt crisis will again take centre stage at next week's EU summit in Brussels when EU leaders try to flesh out plans for a growth and jobs pact agreed at the June summit.

Eurozone gives Greece 10-day ultimatum

Eurozone ministers have given Greece 10 days to implement budget cuts in return for a bailout cash, as Germany Merkel braves protesters on a visit to Athens.

Hungary tops EU anti-fraud investigation list

In its annual report, the EU's anti-fraud agency said it concluded nine investigations into Hungary and found irregularities in seven cases. In total, the agency recommended the recovery of €371m EU-wide.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

News in Brief

  1. Doubt cast on new Maltese inquiry into slain reporter
  2. March by Slovak Catholics seeks abortion ban
  3. 600,000 stranded on holiday as Thomas Cook collapses
  4. Egypt: hundreds of protesters arrested over weekend
  5. Global car industry fears no-deal Brexit shock
  6. France: de-escalation between US and Iran priority
  7. Spain demands UK 'reciprocity' on resident rights
  8. Ireland: right Brexit deal is 'not yet close'

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  2. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  3. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  4. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  5. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  6. Nordic Council of MinistersNo evidence that social media are harmful to young people
  7. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  8. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  9. Nordic Council of MinistersEducation gets refugees into work
  10. Counter BalanceSign the petition to help reform the EU’s Bank
  11. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  12. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness

Join EUobserver

Support quality EU news

Join us