BERLIN (MNI) – Germany’s Finance Minister Wolfgang Schaeuble warned
on Thursday of the risk of contagion to the real economy from the
Eurozone debt crisis.
“Unfortunately, there are signs of that,” Schaeuble said in a
speech at an insurance industry conference here. “We are witnessing
continued rising uncertainties among market participants.”
Schaeuble said markets are exaggerating the risk premia they are
demanding on government bonds of some Eurozone member states. “Markets
are not always acting rationally,” he said.
He said that excessive liquidity worldwide was a problem, and he
added that he was skeptical about the U.S. approach to dealing with the
crisis. The U.S. Federal Reserve has pumped trillions of dollars into
the economy by buying up Treasuries and other assets – a policy that has
been a longstanding source of disagreement between Germany and the U.S.
Commenting on the government changes in Italy and Greece, Schauble
said he hoped that confidence of markets regarding those two countries
would return eventually.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$G$$$,MFX$$$,MT$$$$]
