Interest Rate Blues: Emerging Nations Demand Western Support

[unhappycamper]

http://www.spiegel.de/international/business/emerging-nations-demanding-western-support-for-flailing-economies-a-954124.html



At the G-20 finance ministers' meeting in Sydney, emerging economies will push for joint action to halt rising interest rates. But the industrialized nations want nothing to do with it and are instead arguing that each country should solve its own problems.

Interest Rate Blues: Emerging Nations Demand Western Support
By Martin Hesse and Christian Reiermann
February 19, 2014 – 05:58 PM

A relatively agreeable meeting is awaiting German Finance Minister Wolfgang Schäuble at the end of this week. The journey itself, to be sure, will be a taxing one; the flight from Berlin to Sydney will take almost 24 hours. But once he arrives, the greatest difficulty will already be behind him.

Under the summer Australian sun, Schäuble will meet with his counterparts from industrialized and emerging economies as part of the G-20 meeting there. As always, the state of the global economy will be the main topic of conversation.

Schäuble and his colleagues from the euro zone, in contrast to previous years, can sit back and relax this time around. Nobody will be trying to force Germany, France or Italy to take immediate action to protect the world economy from turbulence in Europe. "The euro as such is no longer the focus of financial market attention as a source of concern," Schäuble recently said with satisfaction. The euro crisis, much to the pleasure of European leaders, has gone dormant. This year, others will be in the spotlight, such as the Americans.

Investors Return to Dollar

Representatives from India, Brazil and Turkey in particular accuse the US Federal Reserve, under the leadership of new head Janet Yellen, of having severely handicapped their economies by backing away from the crisis driven policies it has pursued in recent years. By reducing the number of US sovereign bonds it purchases, the Fed has triggered a rise in US interest rates, with the consequence that a flood of investors are now returning to the dollar from emerging economies.