German Finance Minister Wolfgang Schaeuble yesterday forecast that market turbulence at the heart of the eurozone’s sovereign debt crisis would calm within a year or two.
“In 12 to 24 months we will see a calming of the financial markets,” Schaeuble told France’s Europe 1 radio.
He was speaking after Francois Baroin, the finance minister of French president Niocolas Sarkozy who left office this week, said that the eurozone debt crisis could go on for another four or five years.
“Concerning the euro’s crisis of confidence, that won’t take so long. I think it’ll move much more quickly,” Schaeuble said.
Amid renewed speculation over a possible Greek exit from the eurozone, Schaeuble repeated Germany’s preference for the debt-hit country to remain in the bloc, under certain conditions.
“We want Greece to remain in Europe, but that presupposes that Greece, for its part, does what’s necessary for Greece to have a healthier economic development,” Schaeuble said.
Germany’s position is that it is prepared to help Greece — with continued EU funding — but that Athens must carry out the reforms agreed in exchange for the bailouts that have been agreed.
Schaeuble also said he was optimistic about Franco-German relations after Socialist French President Francois Hollande was this week sworn in, having vowed to add growth stimulus measures to an EU austerity pact.
“Franco-German cooperation is independent of the issue of elections in one country or the other,” Schaeuble said.
“Elections don’t call into question agreements that have already been made, they continue. Under President Hollande, some policies will change, but I don’t think that France will not stick to its treaties,” Schaeuble said.
Despite initial German reticence, Hollande’s call for stimulus measures on top of austerity has been gaining ground, with key European leaders on Thursday agreeing that both growth and cutting budget deficits are needed.
French Prime Minister Jean-Marc Ayrault yesterday said that he expected a deal on growth measures to be thrashed out at an EU summit on June 28-29.
“What’s important in the Franco-German relationship is mutual respect,” Ayrault told France Inter radio.
“I know that country well,” said Ayrault, a former German school teacher and avowed Germanophile. “We have to talk to each other frankly. What we agree on, what we disagree on.”
Ayrault, who only took office on Wednesday, said that some “convergence” should be reached during an informal EU summit on Wednesday.
“But this can’t be done in 24 or 48 hours. We have to do this seriously,” Ayrault said.
“I remind you that we have another European summit at the end of June. Between now and then, we have a lot of work to do,” he said.