Unstable loans and escalating levels of global debt could plunge the world into another financial crisis, departing German Finance Minister Wolfgang Schaeuble told the Financial Times in an interview published Sunday.
“Economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt … I myself am concerned about this, too,” he said.
Schaeuble, who is poised to become speaker of the Bundestag in Germany’s new government, warned that “new bubbles” could soon emerge after central banks pumped trillions of dollars into financial markets.
The German finance minister also said he was concerned about the potential weakness in the euro zone as banks attempted to cope with the post-crisis legacy of underperforming loans.
Schaeuble has long been the most pro-European politician in Chancellor Angela Merkel’s cabinet and was a key influence to the continent’s policy response to the euro zone debt crisis. While the proponent of Europe has guided one of the world’s largest economies for the past eight years, he has also been pilloried in countries such as Greece for being an architect of austerity. Schaeuble raised his concerns for the global economy ahead of his final Eurogroup meeting in Luxembourg on Monday, where finance chiefs from all euro zone nations are set to meet.