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Germany against G-20 fiscal stimulus package: Schaeuble
[SHANGHAI] Germany is against the world's major economies launching a fiscal stimulus package in the face of slowing global growth, its finance minister said Friday, setting the stage for a disagreement with the United States.
Government attempts to boost their economies with monetary loosening could be "counterproductive", Wolfgang Schaeuble told a conference ahead of a G-20 finance ministers meeting in Shanghai.
Central bankers have come under pressure ahead of the meeting of the world's top economies to unleash fresh monetary firepower to help stimulate sagging growth and reassure investors.
Japan has already adopted negative interest rates, the European Central Bank has embarked on a huge quantitative easing programme, and the US Federal Reserve has signalled possible delays to interest rate rises.
Mr Schaeuble said that "thinking about further stimulus just distracts from the real task at hand," adding that Berlin does "not agree on a G-20 fiscal stimulus package".
"Monetary policy is extremely accommodating to the point that it may even be counterproductive in terms of negative side effects," he said.
"Fiscal as well as monetary policies have reached their limits, if you want the real economy to grow there are no shortcuts without reforms." His comments contrasted with US Treasury Secretary Jacob Lew, who said earlier this week that fiscal and monetary policy were "important tools".
"When used together, they're powerful. And that's the message we bring," he told Bloomberg Television.
"It means that in countries that are big economies, regions that have big economies, they need to use policy tools." As the European Union's largest and richest country Germany, often has different economic priorities than the other members.
Mr Schaeuble, known for being frank, has previously openly criticised the ECB for being too accommodative.
The use of spending over the last two decades to mitigate against economic crisis no longer appeared to work, he said Friday, adding that debt levels were too high while growth remained too low.
"The debt-financed growth model has reached its limits," he said. "If we continue on this path we no longer need to watch television, the walking dead will overwhelm us, particularly in finance and construction."
He did not specify in which countries such zombie enterprises existed - although they are a perennial issue in China.