“Without stable public finances, monetary policy will always be able to do things that it shouldn’t do with a view to currency stability,” says the IfW researcher.
(Photo: Imago Images)
Berlin Stefan Kooths has only been one of two interim presidents of the influential Kiel Institute for the World Economy (IfW) since the beginning of December. The economist is already calling on the new federal government to take rigorous measures.
The government must make it clear that “there is no alternative to the euro for Germany,” Kooths said in an interview with Handelsblatt. Otherwise, Kooths fears significant price increases and fundamental damage to the European economy.
Kooths sees the dwindling independence of the European Central Bank (ECB) due to the high national debt of many euro countries as the trigger for this. The ECB has been relying on extremely low interest rates for years. “Without stable public finances, monetary policy will always be able to do things that it shouldn’t do with a view to currency stability,” explained Kooths. There is a threat of drifting into an “inflation regime”. The most recent decisions by the ECB gave little hope of improvement.
Read on now
Get access to this and every other article in the
Web and in our app for 4 weeks free of charge.
Continue
Read on now
Get access to this and every other article in the
Web and in our app for 4 weeks free of charge.
Continue