The United States and Japan must share
responsibility with Europe for ensuring global economic stability, German
Finance Minister Wolfgang Schaeuble said, signaling that a G20 meeting this
weekend should not focus solely on the euro zone crisis.
Speaking in an interview before finance ministers and central bankers from the
Group of 20 nations meet in Mexico, he said top economies must
pursue structural reforms and fiscal consolidation to win back market trust and
build sustainable growth.
Schaeuble
also said in emailed answers to questions submitted by Reuters that he saw no
danger of delay in the introduction of Basel III rules on banking capital that
are due to be phased in from January.
Schaeuble
does not want the two-day G20 meeting in Mexico City to concentrate exclusively on the euro
zone crisis to the detriment of
other urgent issues such as the "fiscal cliff" facing the United
States and Japan's debt problems.
"The
United States and Japan bear as great a responsibility for (ensuring stability)
as we Europeans," he said.
"The
G20 economies must decisively win back confidence with structural reforms and
sustainable financial policies. This is the most important precondition for
strengthening global economic conditions," Schaeuble said.
"Without
consolidation and reforms we risk further loss of confidence and still less
growth. No sustainable growth can be built on a mountain of debt," said
the minister, known for his advocacy of fiscal rigor even in times of
recession.
In
the United States, existing legislation will raise taxes and cut spending to
the tune of about $600 billion in 2013 unless lawmakers take action. However,
Republicans and Democrats have yet to agree on measures to avoid this
"fiscal cliff", which could cause the economy to contract.
The
G20, which brings together major wealthy and emerging economies, must measure
its progress by the goals it set at its Toronto summit two years ago, he added.
There the developed countries committed to halve their budget deficits by 2013
and to stabilize their debt load by 2015.
Schaeuble
has taken a tough line on Greece and other weaker members of the euro zone
during the region's three-year sovereign debt crisis, insisting they swallow
austerity medicine even as their economies sink deeper into recession.
But
he had warm words for Spain, saying it was on the
"right path" and that there were signs - seen for example in falling
wage costs and in the current account - that its economic imbalances were
improving.
Schaeuble
reiterated that Greece, still locked in difficult talks with its international
creditors aimed at averting bankruptcy, must implement the tough measures it
has promised.
The
minister dampened expectations that the euro zone's new bailout fund, the
European Stability Mechanism (ESM), might soon be able to recapitalize banks
directly, reiterating that a planned new oversight body must first be fully
functional.
"It
is important that liability and control go hand-in-hand. In other words,
quality clearly comes before speed," he said.
Schaeuble
said he did not fear delays in implementation of the Basel III rules or the
possibility that the United States and Britain - which have both criticized
them as too unwieldy to work - might not adopt them.
Basel
III is the world's regulatory response to the financial crisis, forcing banks
to triple the amount of basic capital they hold in a bid to avoid future
taxpayer bailouts.
"Like
other international financial market reforms, Basel III and its implementation
in the most important global financial centers are subject to an
internationally-agreed regime of checking procedures," he said.
The
G20's regulatory arm, the Financial Stability Board (FSB), will complete
proposals by the time of the group's next summit in September 2013 on
regulation of non-bank financial institutions ranging from hedge funds to insurance companies.
"We
welcome the broad international consensus on a strict regulation of money
market funds which act very similarly to banks," Schaeuble said.
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