MEXICO CITY (MNI) – The global economy faces a variety of risks but
if these do not materialize, next year should bring a pickup in growth,
European Central Bank Governing Council member Jens Weidmann said
Monday.

Briefing the press following the Group of 20 meeting, the
Bundesbank president said in addition to the weakening of emerging
economies — which he noted was also due to “homemade causes” — the
so-called fiscal cliff in the U.S. and weak growth as well as a poor
debt situation in Japan all threaten growth.

Still, “reforms on the national level are starting to take effect,”
he said.

“Inasmuch, we assume that if these risks do not materialize, we can
expect an economic acceleration next year.”

At the moment, he said, “the economy is standing still. The global
economy since the summer has only had a very reserved development” and
the Eurozone is exhibiting “weak growth.”

Although “to be sure, the German economy is showing itself to be
robust” for now, the general economic environment will take its toll
yet, he said.

“The demand from abroad is diminishing” and companies are growing
more hesitant to hire, he said. As a consequence, the first part of next
year will see the German economy more or less stagnate, he predicted.

Weidmann rejected calls to emphasize “short-term economic
stimulation” over measures to ensure growth over the medium to longer
term.

Similarly, he repeated his opposition to proposals that Germany use
any fiscal room to maneuver it might have to support demand and thus
ultimately benefit struggling periphery countries of the euro area.

This “in the end really doesn’t bring all that much,” he said.
While others would thus hardly profit from it, at the same time, Germany
would lose its valuable position as an anchor of stability.

German Finance Minister Wolfgang Schaeuble also made clear at the
briefing that he is opposed to the idea of Germany using its fiscal room
to maneuver and argued instead for a structurally balanced federal
budget by 2014.

He also described Germany as an anchor of stability within the
Eurozone, which he said is just barely managing to avoid a recession
thanks to German growth.

He said the G20 did not discuss Greece, but participants were told
every effort is being made to find a sustainable solution.

–MNI Frankfurt bureau tel: +49-69-720-142. Email: dbarwick@mni-news.com

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