BERLIN (MNI) – The German government on Monday reaffirmed the need
to start consolidating public budgets next year in order to achieve
sustainable economic growth.
“There is no sustainable growth which is based on persistently
inflated fiscal policy,” government spokesman Ulrich Wilhelm said at a
regular press conference here.
Without budget consolidation, the government will lack the strength
to undertake the necessary investments, he argued. This would lead to a
“severe threat to future growth possibilities and would be certainly
punished by financial markets,” Wilhelm said.
German Economics Minister Rainer Bruederle, however, warned in a
newspaper interview published Monday that authorities should not
endanger the German economy by cutting expenditures too much.
“We need to be careful about everything that supports growth,”
Bruederle told German business daily Financial Times Deutschland (FTD).
“We must not destroy ourselves through consolidation,” he said.
The government should not focus too much on cutting expenditures
but should also keep the competitiveness of the country in mind, the
minister urged.
Meanwhile, European Union Budget Commissioner Janusz Lewandowski
told German daily Tagesspiegel in an interview published Monday that he
was worried “a policy of overdrawn consolidation could lead to a
deflation” in the EU.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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