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Deficit-cutting is European, not German policy

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(Globalpost/GlobalPost)

German Finance Minister Wolfgang Schaeuble insisted Saturday that Germany's European partners agreed with deficit reduction, as pressure grew on Berlin to back a less austere, more growth-friendly economic crisis approach.

"Nobody should have the misunderstanding that there is an alternative for reducing deficits," Schaeuble said to reporters at the spring meetings of the International Monetary Fund and World Bank.

"It is not a German position, it is a common position," he said.

"We are totally united."

Germany was pressed at the IMF meetings to ease off pressure on the eurozone's troubled periphery countries to cut spending to right their finances quickly, with IMF experts and other members saying that growth needs more demand stimulation.

Berlin has repeatedly turned back some claims, saying the austere debt and deficit reduction programs of countries like Greece, Portugal, Ireland are essential to rebuilding the eurozone economy.

Schaeuble warned of "unrealistic" expectations for growth in the European Union, which remains deep in recession.

Europe will not be "the big driver of growth," he said. He forecast long-term growth in Europe to be at 1.0-1.5 percent, "rather than significantly higher."

"We are very successful," he said. "We don't have enough growth actually, but we are on the right path."

"We have made progress to overcome the crisis of confidence in the euro. We have made a lot of progress through structural reforms."

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http://www.globalpost.com/dispatch/news/afp/130420/deficit-cutting-european-not-german-policy