Fiscal expansion isn’t welcome in Europe
On Wednesday, Jens Weidmann shares a statement regarding the prospects of further fiscal expansion in the European Union.
A great number of Eurozone countries don’t boast the leeway or simply urgent need to boost their fiscal spending. Respectively, they are expected to focus on reforms instead lifting their growth potential. That’s what German Bundesbank’s head, Jens Weidmann stressed on Wednesday.
It’s apparent that an expansionary monetary stance is appropriate now, but on the other hand, it shouldn’t be maintained longer than absolutely required. It’s because over time the negative side effects tend to grow. That was the final Weidmann’s warning before departing for the G7 summit in Japan.
Expansive monetary policy as well as fiscal policies can hardly power growth in the long run, as Weidmann stated. By the way, he’s also the member of the European Central Bank's Governing Council.
Weidmann added he doesn’t see the urgent need as well as required space in many countries for an expansive fiscal policy.