Schäuble Warns Worst Is Yet to Come

Europe’s debt crisis seems to have entered a calm phase, but that’s only an illusion, German Finance Minister Wolfgang Schäuble said on Tuesday. The worst is probably still to come, he warned.

The financial markets have been notably calm of late. Stock indexes have ticked upwards and interest rates on sovereign bonds have drifted downwards. The euro has also remained relatively stable against the dollar. And investor panic seems to have dissipated.

But appearances can be deceiving, said German Finance Minister WolfgangSchäuble on Tuesday. “I’m not so sure that the worst of the crisis is behind us,” he said at a mechanical engineering conference in Berlin, warning that reform efforts needed to be re-doubled to ensure that trust in the euro returns.

His comments were echoed by Yves Mersch, a member of the European Central Bank Governing Council who was also present at the event. He warned that even if calm had returned to the markets, it could be deceptive. “The bleeding has been stopped, but the patient is not yet in the clear,” he said.

Full article: Schäuble Warns Worst Is Yet to Come (Spiegel Online)

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