High-level divisions over the handling of the eurozone crisis burst into the open yesterday when Germany’s finance minister rebuked the head of the International Monetary Fund for warning European leaders to ease their demands for ever-tighter austerity in troubled peripheral economies.
Wolfgang Schäuble said that Christine Lagarde had appeared to contradict the IMF’s own stance in advocating an easing of austerity, noting that the fund had “time and again” warned that high debt levels threatened economic growth.
“When there is a certain medium-term goal, it doesn’t build confidence when one starts by going in a different direction,” Mr Schäuble said. “When you want to climb a big mountain and you start climbing down the mountain, then the mountain will get even higher.”