Axel Weber warns of further interest rate increases in the euro area
Criticism of ECB monetary policy, budget debates and the urgency of climate protection investments
Adam Giddens (AG)May 15, 2025
Axel Weber, the former head of UBS, said in an interview with the Handelsblatt that further interest rate increases in the euro area were possible. He emphasized that in his opinion the interest rate peak has not yet been reached and that interest rates will not fall soon. Weber is currently working as a consultant for the asset manager Flossbach von Storch.
In the interview, which took place at the asset manager's headquarters, Weber expressed his criticism of the monetary policy of the European Central Bank (ECB) and the Federal Reserve (Fed). He criticized that they had underestimated the rising inflation rates and warned of further distortions on the financial markets. He also accused the German traffic light coalition of diversionary tactics in the budget debate.
Weber expressed his concerns regarding the federal government's budget crisis and the suspension of the debt brake. He criticized the lack of a regulatory basis and emphasized that the money that had already been spent must be placed on a secure legal basis. Weber argued that the Ministry of Finance should reconsider the economic viability of the planned expenditure.
Weber also spoke about the need for austerity measures in the German government. He emphasized that the coalition supports too many inefficient companies and gives out too many subsidies and tax breaks. In particular, he criticized exceptions to inheritance and gift taxes as well as in areas such as climate-efficient buildings and microelectronics.
Another important topic of the interview was climate protection. Weber emphasized the need for investments in climate-neutral infrastructure and suggested steering taxes such as a CO2 tax or emissions trading as financing options. However, he criticized the fact that only a small proportion of emissions rights were traded at prices that correspond to the Paris climate protection agreements.
Finally, Weber commented on the current interest rate policy and warned of a wage-price spiral due to rising inflation rates. He emphasized that interest rates would not fall again soon and that zero and negative interest rates were not a normal interest rate environment. Weber criticized the ECB for reacting too late to inflation and described this as one of the biggest mistakes in monetary policy in the current century.
