Merkel warns against ’race’ to spur growth
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AFP
Oluşturulma Tarihi: Kasım 27, 2008 00:00
BERLIN - German Chancellor Angela Merkel defended yesterday her softly-softly approach to tackling the global downturn as neighbors clamor for Europe's biggest economy to lead the way out of a crippling recession.
In a speech to parliament, Merkel warned against a "race" between European Union states over the size of their stimulus packages and insisted Berlin was already pulling its weight.
"We should not fall into a race of billions (of euros)," Merkel said as the European Commission proposed a sweeping package that sources said was worth 200 billion euros ($260 billion) to jolt the economy out of recession.
Earlier this month, Berlin presented measures aimed at jumpstarting the German economy that Merkel says are worth 32 billion euros and will lead to 50 billion euros in new investment. She said those plans more than covered Berlin's fair contribution to the EU growth scheme.
"Germany is absolutely in line if the European Commission asks us to put at least one percent of our GDP (Gross Domestic Product) into economic measures," Merkel said.
She acknowledged that she and other world leaders were helpless to say where the current turmoil would lead.
"We cannot predict everything that will come," she said. "That is part of telling the truth."
But she said Germany needed "a policy of moderation, centrism and practical reason" to face the downturn.
Merkel has come under fire at home and abroad to do more, with a growing chorus of critics - even from her own party - saying that Germany's relatively comfortable budgetary position gives it more room for maneuver.
French President Nicolas Sarkozy, who holds the rotating EU presidency, expressed his exasperation after talks with Merkel Monday over her reluctance to back wholeheartedly a Europe-wide growth initiative.
He wryly remarked that on the economic stimulus front, "France is working on that, Germany is thinking about it." Others have called for Merkel to follow Britain's lead in cutting value added tax to get consumers to spend more and so drive the country out of recession.
But she has categorically rejected such a move, saying Europe had other tools at its disposal.
"We could also from time to time reflect on the fact that we can also achieve something without money," Merkel said, citing cutting back on red tape so that European funding could be released more quickly.
"We should not fall into a race of billions (of euros)," Merkel said as the European Commission proposed a sweeping package that sources said was worth 200 billion euros ($260 billion) to jolt the economy out of recession.
Earlier this month, Berlin presented measures aimed at jumpstarting the German economy that Merkel says are worth 32 billion euros and will lead to 50 billion euros in new investment. She said those plans more than covered Berlin's fair contribution to the EU growth scheme.
"Germany is absolutely in line if the European Commission asks us to put at least one percent of our GDP (Gross Domestic Product) into economic measures," Merkel said.
She acknowledged that she and other world leaders were helpless to say where the current turmoil would lead.
"We cannot predict everything that will come," she said. "That is part of telling the truth."
But she said Germany needed "a policy of moderation, centrism and practical reason" to face the downturn.
Merkel has come under fire at home and abroad to do more, with a growing chorus of critics - even from her own party - saying that Germany's relatively comfortable budgetary position gives it more room for maneuver.
French President Nicolas Sarkozy, who holds the rotating EU presidency, expressed his exasperation after talks with Merkel Monday over her reluctance to back wholeheartedly a Europe-wide growth initiative.
He wryly remarked that on the economic stimulus front, "France is working on that, Germany is thinking about it." Others have called for Merkel to follow Britain's lead in cutting value added tax to get consumers to spend more and so drive the country out of recession.
But she has categorically rejected such a move, saying Europe had other tools at its disposal.
"We could also from time to time reflect on the fact that we can also achieve something without money," Merkel said, citing cutting back on red tape so that European funding could be released more quickly.