Wolfgang Schaeuble, the departing Finance Minister of Germany, has warned that the rising global debt and unstable loans could tip the world into yet another financial crisis. He said economists from all over the globe have expressed concern about the rising risks which comes with the accumulation of large liquidity. There is also the growth of private and public debt. The German said that he himself was concerned about the state of affairs.
Bubbles and crash
Schaeuble is leaving his finance ministry post to become the speaker of Bundestag, the German Parliament. He said that he is fearful of new bubbles forming after many central banks pushed in trillions of dollars into the financial markets. He also mentioned his concern about probable weakness located in Euro Zone as the banks try to cope with the persistent problem of under-performing loans.
Schaeuble is both popular and heavily disliked across the EU for his stinging criticism of European Central Bank (ECB). The ECB has instituted a loose monetary policy from the time of the financial crisis. He has repeatedly warned that the global financial activities are in danger of bubbles forming due to large cash injections by ECB and Federal Reserve of the United States. He is not alone in voicing such concerns. Christine Lagarde, the Managing Director of International Monetary Fund, mentioned identical concerns. She said that the world economy faces threats in the near future. This, she mentioned, is associated with increasing debt, even though a slow global economic revery is taking place. Lagarde mentioned super high levels of debt of many countries, China's haste credit expansion, and taking excessive risks by playing the financial markets.
Pro-Europe and hated
The former German foreign minister has been known to be a pro-European politician in the cabinet headed by Chancellor Angela Merkel. Schaeuble played an influential role in the policy response of the European Union when the debt crisis of the Euro Zone broadended the EU. Even though he was hailed as an expert in guiding the globe's largest economies during the last eight years, a number of countries inside the EU have severely criticized him for creating austerity economics. The minister raised all his global economy concerns ahead of the final meeting of the Eurogroup countries in Luxembourg during the second week of October. He is scheduled to meet all the finance chiefs of the Euro Zone nations during that time.