Studio Guest - Thomas Straubhaar
- 00:03:10
- DW-World
Studio Guest - Thomas Straubhaar
Our studio guest this week is Thomas Straubhaar, director of the Hamburg Institute of International Economics. He will be commenting on the development of the eurozone interest rate and looking ahead to discuss Germany's future growth prospects. DW-TV: And for more I'm joined by Thomas Straubhaar from the Hamburg Institute of International Economics. So now we have an industry that says there is no crisis, it's actually just being created by the media spreading negative news. What's your take on that? Thomas Straubhaar: "It's obvious that the financial crisis has become an economic crisis worldwide and that we have a world recession at the moment. There's a lot of negative news but, on the other hand, we have a bunch of good news. And I think we could still hope that this recession is rather mild and short, and not long and strong." DW-TV: OK, there's always hope. For example, there could be some good news coming from central banks. Obviously they're doing their bit to help weather the storm. The European Central Bank now dropped its key interest rate from 2.5 to 2 percent. The US Federal Reserve has gone even further, lowering interest rates from a former 5 percent to now basically zero. In what way does that help? Is that the right way to go about it? Thomas Straubhaar: "Definitely it makes credits much cheaper. It helps us to take a credit for almost nothing, so it will stabilize consumption, it will stimulate investments and both together will stimulate demand. So I think that's some of the good news that we should care much more about." DW-TV: That's a good signal but just in case it doesn't kick in quite sufficiently, where do you go from zero percent interest rates? Thomas Straubhaar: "That's fully right, but on the other hand we also have fiscal policy. All over the world governments have just decided to support their local economies with strong programs to support local consumption: to make infrastructure projects, to realize them much sooner than planned, to get credits to everybody who need credits. So I think beyond monetary policies, politics, we could have this fiscal policy and it will also have an impulse on the economy over the year." DW-TV: Now a new president is stepping into office with Barack Obama in the United States. What sort of stimulus do you expect from him then? Thomas Straubhaar: "Much, I think probably too much. All we expect is that he will turn around the psychology of this crisis. Alone the wish to change something, to have a new start after an administration that has not been successful economically and politically. So I think that's the best support we can imagine from the political side, that the new president will have new ideas, new thoughts about how to handle this crisis." DW-TV: Thomas Straubhaar, thank you very much for joining us. Interviewer: Monika Jones
DW-World | January 20, 2009
