Monday

2nd Oct 2023

US keen for Germany to lead EU out of crisis

US treasury secretary Jack Lew on Tuesday (9 April) hinted that Germany should boost its internal demand to help Europe get out of the crisis.

But German finance minister Wolfgang Schaeuble said Berlin has no need for US tutelage.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Lew (r) - the US has an 'immense stake' in seeing the euro-crisis come to an end (Photo: Joerg Rueger/German ministry of finance)

"We need to balance policies of growth and fiscal consolidation. The driving force behind any recovery is consumer demand, so any policies to help encourage consumer demand in countries that have the capacity would be helpful," Lew said during a joint press conference with Schaeuble in Berlin.

Germany has a policy of keeping down wages in order to make it a more attractive location for manufacturers and exporters.

But the low pay stymies growth in German domestic consumption.

At the same time, its firm policy on avoiding inflation has kept the euro relatively strong on currency markets, hampering efforts by crisis-hit eurozone states, such as Greece or Spain, to export their way out of trouble.

For his part, Schaeuble, while welcoming the new US minister on his first visit to Berlin, said there is no need for Germany or the US to give "lessons" or "grades" to each other.

"We need to understand each other. The situation in the US is completely different than the one in Europe and I was trying to explain that," he told press.

"I tried to explain to him the complicated structures we have here in Europe. We are on the right way [out of the crisis], but we have complex decision making structures," he added.

Both officials tried to downplay their differences on how to balance austerity with growth-spurring measures.

"I would emphasise the areas where we agree - we share a commitment to growth and to fiscal discipline," Lew said.

According to one German official, the two ministers had a "getting to know each-other-kind-of meeting."

The contact noted that Lew simply set out what the US is doing to stimulate growth and asked what Germany is doing on the same front.

The source said they also discussed the Cyprus bailout, with Schaeuble "explaining more what happened, how we came to this decision rather than looking forward in terms of what comes next."

Lew also showed interest in the EU's so-called banking union - a subject he also raised at meetings in Brussels and Frankfurt, the headquarters of the European Central Bank (ECB), on Monday.

The banking union project envisages making the ECB into a single supervisor of all big eurozone banks, as well as common EU ruleson how to wind down or recapitalise failing lenders.

Germany is currently opposing any model which involves joint risk-taking - in other words, German taxpayers having to pay for failing banks in Spain or Cyprus.

During a press statement on Monday in Brussels after meeting EU council chief Herman Van Rompuy, Lew said he "appreciated the chance to hear about the scope to broaden the framework for oversight and risk sharing in line with euro-area's large and interconnected banking sector."

He also stressed that the US has an "immense stake" in Europe's economic recovery.

Later on Tuesday, Lew was set to fly to Paris to meet his French counterpart Pierre Moscovici, who rescheduled his US meeting amid an ongoing tax evasion scandal surrounding a former minister.

IMF warns Europe of falling behind US on recovery

Europe is falling behind the US in emerging from the economic crisis, with sluggish growth in Germany and recession in France worsening the outlook for eurozone periphery countries, the IMF has said.

IEA says: Go green now, save €11 trillion later

The International Energy Agency finds that the clean energy investment needed to stay below 1.5 degrees Celsius warming saves $12 trillion [€11.3 trillion] in fuel expenditure — and creates double the amount of jobs lost in fossil fuel-related industries.

Opinion

How do you make embarrassing EU documents 'disappear'?

The EU Commission's new magic formula for avoiding scrutiny is simple. You declare the documents in question to be "short-lived correspondence for a preliminary exchange of views" and thus exempt them from being logged in the official inventory.

Latest News

  1. EU women promised new dawn under anti-violence pact
  2. Three steps EU can take to halt Azerbaijan's mafia-style bullying
  3. Punish Belarus too for aiding Putin's Ukraine war
  4. Added-value for Russia diamond ban, as G7 and EU prepare sanctions
  5. EU states to agree on asylum crisis bill, say EU officials
  6. Poland's culture of fear after three years of abortion 'ban'
  7. Time for a reset: EU regional funding needs overhauling
  8. Germany tightens police checks on Czech and Polish border

Stakeholders' Highlights

  1. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  2. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  6. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch

Stakeholders' Highlights

  1. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations
  2. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  3. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  4. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  5. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  6. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics

Join EUobserver

Support quality EU news

Join us