German Finance Minister Schäuble defends Berlin′s policy in Davos | Business| Economy and finance news from a German perspective | DW | 24.01.2014
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German Finance Minister Schäuble defends Berlin's policy in Davos

Speaking at the World Economic Forum in Davos, Switzerland, German Finance Minister Wolfgang Schäuble defended Berlin's policy during the eurozone debt crisis. He said budget discipline remained a priority.

In a panel event led by DW Director General Peter Limbourg, German Finance Minister Wolfgang Schäuble said in Davos on Friday the new government in Berlin would stick its objective of presenting a balanced budget next year, renouncing any fresh borrowing.

He said budget consolidation had helped Germany emerge from the global financial crisis stronger as he suggested fellow euro-area nations - particularly in the troubled southern parts of the 18-member bloc - should keep up efforts to rein in spending.

Schäuble said he had huge respect for the social hardships that ordinary Greeks were enduring because of what he called necessary austerity measures. He argued Athens was well on the way to getting its finances in order with the help of its international bailout program, adding painful reforms were beginning to have a positive impact.

He acknowledged, though, that ongoing political instability in Greece constituted a headache, arguing that the fragile situation was also brought about by the problems the country was facing with regard to the number of migrants arriving, resulting in xenophobic sentiments.

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The minister argued that despite ongoing problems, the eurozone was no longer the No. 1 threat to global economic stability.

Schäuble remarked he had hoped for a more differentiated look at Germany's large trade surplus in favor of its exports. He noted that there was basically no trade imbalance when it came to shipments to or from the euro area itself, adding that many fellow members would have been far worse off during the crisis without steady German imports.

He promised, though, the government would take all necessary measures to further increase domestic demand so as to bring down the overall trade surplus.

Asked about why there were so few high-ranking German representatives at the Davos forum this year, Schäuble maintained that was due to the new grand coalition government back home having to get its act together, while Chancellor Angels Merkel, who was still recovering from a skiing accident in Switzerland, was busy preparing a government declaration before the national parliament in Berlin next week.

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