MNI BRIEF: Germany Wants Tough Fiscal Stance To Contain Rates

German Finance Minister Christian Lindner said on Tuesday that European Union fiscal policies needed to be as “tough” as possible in order to prevent interest rates remaining elevated for a long period. (MNI SOURCES: Most At ECB See 4% Rate As Only Outside Chance)

Lindner said he was preparing a 2024 German budget that would return the country to the provisions of its constitutional debt brake, suspended in the wake of the energy crisis provoked by Russia’s invasion of Ukraine last year.

“Fiscal and monetary policy have to work hand in hand,” Lindner told reporters. “We have to coordinate fiscal and monetary policy as tough as we can.”

A lack of strong support from the fiscal side, would lead to “elevated rates for a longer period,” he said.

Lindner also ruled out agreement on European Deposit Insurance until there was progress on Regulatory Treatment of Sovereign Exposure.