SPIEGEL Interview with Finance Minister Schäuble: 'We Can't Allow a Second Lehman Brothers'

Spiegel
July 4, 2011

Last week, Greece passed strict austerity measures and is out of immediate danger of insolvency. For now. SPIEGEL spoke with German Finance Minister Wolfgang Schäuble about what happens next, whether a Greek default is inevitable and how dangerous the debt crisis is for democracy.

SPIEGEL: Minister Schäuble, 15 years ago, a leading German politician wrote a book in which he predicted that the euro would no longer allow countries belonging to the European common currency the luxury of "relapsing into comfortable debt creation." Do you have any idea who made this prognosis?

Wolfgang Schäuble: I have an idea, but I'm sure you're going to tell me.

SPIEGEL: It was the then-floor leader of conservatives in parliament, Wolfgang Schäuble.

Schäuble: At the time, I was expressing an expectation that many held -- and current tendencies have confirmed it. In the case of Greece, we are currently seeing that the currency union doesn't allow its member states to pursue unsound financial policies for extended periods.

SPIEGEL: But, in the case of Greece, we have also seen that politicians have ignored such problems for years. This is now forcing them to break promises that they made in European Union treaties stipulating that Germany wouldn't be required to cover the debts of other member countries. Has the euro lost its credibility?

Schäuble: If we are going to have a common currency, we also have to be able to defend it -- and to do so in a way consistent with EU treaties. We've managed to do that: The euro is stable, and an increasing number of countries are denominating their financial reserves in the euro not least because of the high degree of faith they have in it. Incidentally, our goal in helping is not to cover the debts of others. More than anything else, we are helping in our own interest.

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