FRANKFURT (MNI) – The German government should not cut taxes in a
procyclical fashion, European Central Bank Executive Board member
Juergen Stark said in an interview with German Manager Magazin.
“Under current conditions it certainly would not be appropriate to
ease taxes in 2011 or 2012,” Stark, a former Bundesbank vice president,
said. He warned that any such cuts would be procyclical policy making.
Given Germany’s strong recovery and the continued expansionary
monetary policy by the ECB, “fiscal policy must be restrictive,” Stark
said. “What is required are national economic policies that act
decisively as a counterweight when needed,” Stark said.
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