The euro region’s sovereign-debt crisis isn’t the only development posing risks to the global economy, a German government official said.
Threats from the U.S. and Japan also must be considered at an international meeting of finance officials in Tokyo this week, the official said in Berlin today, speaking on condition of anonymity according to government protocol.
The German government wants to engage in a fair and balanced perspective of global economic development, in which Europe will play a role along with other regions, including the so-called BRIC bloc, the official said before German Finance Minister Wolfgang Schaeuble travels to Tokyo for the meeting.
Schaeuble will make the point at international discussions that monetary-policy tools can’t solve problems in the long run and that fiscal and structural adjustments are needed to return countries to sustainable fiscal positions, the official said.
The German finance chief will explain to international partners the role of the European Stability Mechanism, the euro region’s permanent financial backstop, in building confidence in Europe’s crisis-solving ability and why the process of setting it up was delayed in Germany. Euro countries must adhere to rules established by the bloc’s fiscal pact on deficit limitations, the official said.
Crisis management efforts mustn’t keep European Union members from discussing the path toward economic, fiscal and political union, the official said.