EU must act to avoid post-Brexit 'conflagration' - German Finance Minister Schaeuble

German Finance Minister Wolfgang Schaeuble said European leaders must act quickly to demonstrate the EU remains the right vehicle to meet the challenges of globalisation following Britain's shock decision to leave.

In an interview with the Augsburger Allgemeine newspaper, veteran conservative lawmaker Schaeuble said the European Union was still the right answer.

"But we must act quickly so that no conflagration emerges from Brexit," Schaeuble told the newspaper.

"Europe must quickly prove that it offers value by dealing with urgent questions" such as the migrant crisis and youth unemployment in southern Europe, he said.

He also reiterated his concern about the effects of low interest rates in the euro zone and other industrialised nations.

"Politicians must act to ease the path towards more growth by creating attractive conditions for private investment and structural reforms," he said, adding the European Central Bank was fulfilling its mandate of focusing on price stability.