G20

G20: spend money or stones

At the G20 Meeting of Finance Ministers in Shanghai, two ways are discussed how to get to the economy: economic stimulus programs hang up or structural reforms to tackle. Rhetorically, of course, are all for reforms.

German Finance Minister Wolfgang Schäuble, the major industrial and emerging economies, called for structural reforms and no new stimulus plans for more growth in the world. “On more Stimulus talk is just a distraction from the real tasks that we face,” he said shortly before a G20 Finanzministerkonferenz in Shanghai.

The model schuldenfinanzierter expenditure programmes have done. The monetary and fiscal policies are at their limits here. IMF Boss Christine Lagarde and the G20 host China agreed in the call for accelerated reforms in order over the long term, more growth. Lagarde considers it possible that the world growth prospects still darken.

Leeway there

Schäuble, Lagarde and other G20 politicians have expressed at conferences, in the run-up to the Finanzministertreffens of the 20 leading industrial and emerging countries (G20). In the group of countries for a long time about the right way of arguing, in order to more growth to come. The United States and the IMF are traditionally considered as the most important proponents of new government spending programmes, especially in countries with financial room for manoeuvre, such as Germany.

Schäuble did and does again and again, with no solid budgets and structural reforms, there could be no sustainable growth. This Position he represented, in Shanghai, about accentuated than in the past. The German Minister welcomed expressly that China, as Präsidentschaftsnation of the G20, the issue of structural reforms, was one of his main themes has made. Will Germany, the 2017 presidency, will build.

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“Stimulus in the System”

Of debt financed G20 spending programs, as some of the case demanded that the current risks to growth reality would think of Germany nothing. “There is already enough Stimulus in the System”. The Minister drew attention to the extremely konjunkturstützende monetary policy with its low interest rates, the more and more risks with bring counterproductive to act threatened and the banks are the life schwermache.

One of the biggest problems is the high debt levels in many countries, both in the public as in the private sector. The presented together with a lack of structural reforms, the main obstacle for sustainable growth. Germany have shown, how by sound budgetary policies and reforms are progressing.

Willingness to reform will wane

China’s Finance Minister Jiwei Lou made with a view to the G20 clearly: “The process of reform in the G20 is behind our expectations”. Therefore, it is more to do to make changes with the goal of more growth. It is true, for example, Access to markets, to facilitate and to the markets more flexibility to create.

IMF chief Christine Lagarde pointed out that her Institution had recently Wachstumsschätzungen for the world to be withdrawn. And she warned: “This does not necessarily mean the end of the story.” Schäuble was in these warnings, and described the current economic uncertainty as a possible harbinger of a coming crisis.

Next Crisis?

Lagarde stressed, it’ll make more sense than ever, on measures for more growth to speak of, and here it go primarily to structural reforms. It was their opinion, however, both on the demand as the supply side fix. This leaves the possibility of further spending programs open.

Also the industrialized countries organization OECD has given the world’s deteriorating economic Outlook, the G20 countries for faster implementation of structural reforms is called. The global growth prospects are expected in the short term turbid remain, said the OECD on Friday. Also weakness in global trade. That is why the reforms are important, in order to increase productivity and to create jobs. The report was created specifically for the G20 Meeting of Finance Ministers in Shanghai had been made.

wen/ul (rtr, dpa)