Germany Willing to Help if Governments Stick to Reform Plan

A top German official has said the country supports Europe’s efforts to kick start the region’s economy — including a quantitative easing (QE) program — but that other countries have to sell reforms to their citizens.

“The task for Germany now today is, through its own policies, structural reforms, its own investments, to support the EU and the Commission when it brings on to the market, so to speak, its stability package,” Sigmar Gabriel, vice-chancellor and federal minister of economic affairs and energy of Germany, said at the World Economic Forum Thursday in Davos, Switzerland.

“But every nation,” he added, “has to have the courage to broach such structural reforms and speak clearly about them without making people afraid. This is difficult.”

There could be significant political cost—such as losing elections—from such structural reforms, Gabriel said, but stressed there was no other choice.

“There is no alternative. The alternative is to simply prolonging the crisis and this situation becomes untenable for citizens,” he said during a discussion about Europe’s economy.

Gabriel also said that reform was possible with growth.

“I also believe that, on the whole, European politics and policies…to stimulate growth, activity and recovery, should not be undertaken by one institution alone,” he said.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza