First the governments of the United States, European Union and the world said injecting trillions of currencies into saving banks and businesses was necessary to prevent a worldwide economic collapse, and now comes a warning they may have put too much money into their rescue plans. German Finance Minister Peer Steinbrueck has warned of the threat of global inflation as a result of the economic and financial crisis and said the world isn’t out of the woods yet. “There is so much money being pumped into the market that there could be a threat of an overloading of the capital markets and worldwide inflation when an economic recovery comes,” Steinbrueck told the newspaper Bild. In the short-term there was no danger, but in the medium-term “We’ll have to see how we can remove the billions in liquidity from the market that we’re now pumping into the economy,” he said. He said this would present a major challenge to central banks, including the European Central Bank, which will have to ensure monetary stability.

Steinbrueck said there was no alternative to the “sensible” stimulus packages that some governments are using to combat the economic downturn. At the same time, he voiced concern “the next crisis is being preprogrammed because of all the enormous debt-financed countermeasures being conducted worldwide.” Official figures released in Germany last week showed inflation in March slowed to 0.5 percent, the lowest since July 1999.

While US President Barack Obama and his treasury officials had been pushing the EU into putting more money into economic stimuli packages, that was rebuffed by Germany and France, and Obama did not get what he wanted at the recent G20 economic summit in London, as the EU continued to resist giving more money to its banks and businesses in what critics said was a giveaway that hadn’t kickstarted the economy as expected and would lead to other problems, as Steinbreuck has now outlined. He also agreed there is no further need for government stimulus packages in Germany after two worth more than 80 billion Euro had already been enacted. “The steps taken in the economic stimulus measures enacted so far need more time for their effect to unfold,” he said. “Let us see what impact the 80 billion euros from the two measures taken so far work without ranting on about a third stimulus package,” he told the Frankfurter Allgemeine Sonntagszeitung.