Germany's Schaeuble warns against addiction to low interest rates

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BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble said on Tuesday he was unhappy with the low interest rate environment and called for rates to rise "sooner rather than later". His call comes amid a vigorous debate at the U.S. Federal Reserve over whether to push ahead with an interest rate hike this year or hold off until the risks associated with a slowdown in China and other global headwinds become clearer. Although it was not the first time Schaeuble has voiced support for a "normalisation" of rates, it also comes at a time when the German economy faces new threats from weakness in emerging markets and a diesel emissions scandal that has damaged its top carmaker Volkswagen . Speaking at an engineering conference in Berlin, Schaeuble described interest rates as "too low" and said this was causing problems, particularly with regard to pension provisions. The European Central Bank has pushed its benchmark interest rate down to a record low of 0.05 percent and is also printing money to lift the euro zone economy and push up low inflation. Schaeuble said the monetary policy being pursued by central banks meant that there was sufficient liquidity on the markets around the world but he added: "I don't want us to get used to it remaining as it is." He warned policymakers against falling into the trap of keeping rates low to actively support the economic outlook, comparing this to the situation of a "drug addict". (Reporting by Klaus Lauer; Writing by Michelle Martin; Editing by Noah Barkin)

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