ST. GALLEN, Switzerland - German Finance Minister Wolfgang Schaeuble said Saturday that the world risks a 7-year recession due to slowdown and debt troubles in America, Europe and Japan, urging debt-ridden countries resort to drastic austerity.

It still needs time for eurozone countries to harvest fruits for their economic and financial reforms. Along with shadows of slowdown and debt crisis in major economies, the world economy may witness "seven lean years," Schaeuble said in a closing speech for the 4th Lindau Nobel Laureate Meeting for Economic Sciences held from August 23 to 27.

Organizers held on Saturday the last round of discussion at St. Gallen University in Switzerland, one of most famous university in Europe for economic studies.

Schaeuble called for closer cooperation in economic policy in Europe to secure long-term growth.  "In order to make that happen, it is crucial for Italy, Spain, Portugal and Greece to immediately balance their budgets and launch framework reforms," he said, referring the work as short-term pain of reform.

The German government is prepared to campaign for initiatives such as transaction tax for financial sectors and ban on short selling, even though the European Union states have not reached consensus on certain moves, the minister said. However, his conservative tone was not shared by Joseph Stiglitz, a Nobel Prize winner in 2001.

The U.S. top economist told Xinhua that the only effective way to save the sluggish U.S. economy would be through fiscal policies rather than monetary. Washington should increase its spending to maintain a considerable growth and to get Americans back to work.

Stiglitz added that the austerity measure would only "turn the economic downturn to the great depression" and replay what happened in 1930s in the United States, which saw a Wall Street crash and a great recession.

In his view, Germany should reverse its budget-cutting drives and lead the way to engage in "expansionary activity," with an aim to pull other eurozone members out of recession and debt troubles.

Schaeuble's speech marked the ending of this year's Nobel Laureate Meeting for economics, which attracted 17 Nobel Prize- winning economists and about 370 young economists around the world.

The Lindau Nobel Laureate Meetings, initially for physics, chemistry, physiology and medicine, were founded in 1951 as "a post-war reconciliation initiative" and have become an international forum for global academic issues. In 2004, meeting for economics was first held, followed by two other gatherings in 2006 and 2008.