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German finance minister optimistic about eurozone

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Staff Writer | January 21, 2017
Wolfgang Schauble, Federal Minister of Finance for Germany, have expressed cautious optimism about euro area economies at the World Economic Forum in Davos, Switzerland.
Minister Wolfgang Schauble
Business in Europe   Cautious optimism
Speaking during a panel session on the global economic outlook for 2017, Schauble admitted that Europe was seeing economic improvement.

"It's true that the eurozone is doing a little bit better," the German Finance Minister admitted, while reminding listeners that many uncertainties remained.

He called a strong Germany economy as a major factor to improvement in the euro area, saying that it was "driven this year by internal consumer demand," and thus maintaining "resilience against geo-political risk."

For Schauble, the major problem for the European monetary union was a gap in competitiveness between members.

Reducing the competitiveness gap "can't be done by weakening the stronger ones," he insisted, adding "we must strengthen the weaker ones. Europe must become more competitive."

Asked about the negative impact of Brexit on European economies, of particular interest since British Prime Minister Theresa May's Tuesday confirmation that Britain would leave the European Union (EU) single market, Schauble saw no immediate concerns.

"In the long term, we don't know, but in 2017 Brexit will not have a negative impact," he said.

The German minister of finance understood the Brexit results as a wake-up call for Europe, while still offering a positive view of the chances for a new trade deal that would minimize damage to both Britain and the EU.