CCTV.com - CNTV English - CCTV News


Homepage > News > Biz >

German minister advocates austerity, warns of 7-year global recession

08-29-2011 09:30 BJT

ST. GALLEN, Switzerland (Xinhua) -- German Finance Minister Wolfgang Schaeuble said Saturday that the world risks a 7-year recession due to slowdown and debt troubles in America, Europe and Japan, urging debt-ridden countries resort to drastic austerity.

It still needs time for eurozone countries to harvest fruits for their economic and financial reforms. Along with shadows of slowdown and debt crisis in major economies, the world economy may witness "seven lean years," Schaeuble said in a closing speech for the 4th Lindau Nobel Laureate Meeting for Economic Sciences held from Aug. 23 to 27.

Organizers held on Saturday the last round of discussion at St. Gallen University in Switzerland, one of most famous university in Europe for economic studies.

Schaeuble called for closer cooperation in economic policy in Europe to secure long-term growth. "In order to make that happen, it is crucial for Italy, Spain, Portugal and Greece to immediately balance their budgets and launch framework reforms," he said, referring the work as short-term pain of reform.

The German government is prepared to campaign for initiatives such as transaction tax for financial sectors and ban on short selling, even though the European Union states have not reached consensus on certain moves, the minister said. However, his conservative tone was not shared by Joseph Stiglitz, a Nobel Prize winner in 2001.

The U.S. top economist told Xinhua that the only effective way to save the sluggish U.S. economy would be through fiscal policies rather than monetary. Washington should increase its spending to maintain a considerable growth and to get Americans back to work.

Stiglitz added that the austerity measure would only "turn the economic downturn to the great depression" and replay what happened in 1930s in the United States, which saw a Wall Street crash and a great recession.

In his view, Germany should reverse its budget-cutting drives and lead the way to engage in "expansionary activity," with an aim to pull other eurozone members out of recession and debt troubles.

Schaeuble's speech marked the ending of this year's Nobel Laureate Meeting for economics, which attracted 17 Nobel Prize- winning economists and about 370 young economists around the world.

The Lindau Nobel Laureate Meetings, initially for physics, chemistry, physiology and medicine, were founded in 1951 as "a post-war reconciliation initiative" and have become an international forum for global academic issues. In 2004, meeting for economics was first held, followed by two other gatherings in 2006 and 2008.

Editor:Wang Xiaomei |Source: Xinhua

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program