Friday, 10 March 2017

German Finance Minister: Need to Limit Fallout From a ‘Hard Brexit’

In World Economy News 10/03/2017

Any potential fallout from a so-called hard Brexit by the U.K. when it leaves the European Union needs to be limited as much as possible, German Finance Minister Wolfgang Schaeuble said.
A hard Brexit, in which Britain loses access to the EU’s single market, appears to be on the agenda because U.K. Prime Minister Theresa May has said immigration controls were a higher priority than access to the EU’s single market.
“We have to do everything to prevent Brexit from marking the beginning of the collapse of the E.U.” Mr. Schaeuble said at an event organized by auditing and consulting firm Deloitte. But “we have an interest for the U.K. to remain a strong country” and to limit damage to the U.K. and the remaining 27 EU countries.
Ms. May has said she plans to formally trigger the Brexit process by the end of March by invoking Article 50 of the Lisbon Treaty, which would result in the U.K.’s exit from the EU in 2019.
Mr. Schaeuble said London would remain an important financial center for Germany and the EU after Brexit.
In his speech, he also pledged that the German government would continue to aim for a balanced budget after this autumn’s general election because such a policy helps to promote sustainable growth.
“The truth is that our good economic situation is a result of a sustainable fiscal policy that we have pursued since the financial crisis” in 2008 and 2009, said Mr. Schaeuble.
“We’ve set the course for such a sustainable policy that we can finance extra spending without taking up new debt also once this legislative term ends.”
The comments come as Chancellor Angela Merkel’s cabinet is due to approve the government’s 2018 budget and medium-term fiscal planning on Wednesday, following this year’s EUR329.1 billion spending target based on expectations that the economy would grow by 1.4%. Details about the 2018 budget are expected to emerge as early as Friday.
Ms Merkel’s government has posted balanced budgets for the past three years, highlighting Germany’s position as one of the more robust large economies in the eurozone.
The balanced budget is a popular achievement at home and one Berlin sees as an inspiration to other governments.

Source: Dow Jones