Germany continued its lonely quest for austerity as the key to the repair of EU finances. The position might not mean much if the region’s largest economy were not the cornerstone of bailout capital.
According to the FT, Germany’s finance minister Wolfgang Schäuble said “The first precondition in order to have sustainable growth everywhere in Europe is fiscal consolidation. If now we talk about growth, it shouldn’t be understood as a change of direction. That would be a mistake.”
The comments must have been taken as an insult because the finanance minister of trouble Spain, Luis de Guindos, was present. His nation has an unemployment rate of over 24% and has moved into a recession. He and leader of other weak nations in the region have argued that austery mixed with some level of stimulus. François Hollande, who is likely to be the next president of France, has pushed for stimulus as well.
Germany’s opposition won’t be turned aside. It has too much money.