BERLIN (MNI) – Peter Bofinger, a member of the German government’s
council of independent economic advisers — the so-called five wise men
— warned Monday in a television interview that Germany’s public budget
cutting efforts could threaten the European economic recovery.

“In Europe we have currently a relatively weak upswing” and the
continent needs Germany as a growth engine, Bofinger told German ARD
public television.

“If we’re now stepping on the brakes in Germany, then the risk is
very large that Europe as a whole will suffer and fall back into
economic stagnation,” he argued.

Europe needs an upswing “so that countries like Spain, Portugal or
Greece can grow out of their debt,” Bofinger said.

The German government aims to cut its structural deficit by E10
billion each year starting in 2011 to bring it down to 0.35% of GDP by
2016 as is required by the country’s constitution.

The government is to announce its consolidation plan for 2011 at a
press conference later today.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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