Wolfgang Schaeuble, the German finance minister, is undoubtedly one of the most important people in European economic policy.
The European Central Bank’s Mario Draghi might edge him out for the number one spot, but out of the finance ministers, everyone knows that Schaeuble reigns supreme.
So when he’s worrying about a financial bubble, as he did in a speech today, it’s worth paying attention.
You can take a look at the text of the speech here, issued by the ministry of finance, but you won’t find the bubble comments — it seems he ad-libbed it.
FastFT has the relevant section of the speech:
“It is certain that we are moving towards the next bubble,” said Mr Schäuble in gloomy speech in Berlin, writes Stefan Wagstyl. “We should draw the lessons from the last [global financial] crisis.”
That’s a bold comment — partly, it’s just a statement of fact (the next bubble gets closer every day), but as the European Union’s most important finance ministers, it’s not a remark made lightly.
The Financial Times also notes that Schaeuble said monetary policy could not do all the heavy lifting — a pretty common complaint from German policymakers.
The Wall Street Journal notes that in March, Bundesbank president Jens Weidmann was suggesting that German house prices were overvalued up to 20% because of easy money policies.
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