ECB’s Juergen Stark is sounding the warning bell. The official says rampant government spending to counter the financial crisis could have long-term implications for the economy and interest rates.
Stark said in an op-ed in the Frankfurter Allgemeine Zeitung, that solid public finances are a prerequisite for sustainable growth, warning “Therefore it is crucial not to miss the right time for the exit from crisis-orientated fiscal stimulus” adding “A further excessive expansion of public finances could have serious consequences for long-term interest rates, economic developments, the stability of the euro zone and therefore not least the monetary policy of the European Central Bank.”
Well, you’ve got my attention Juergen!!!
Stark also said there are increasingly clear signs of an economic recovery next year.
