BERLIN (MNI) – German Chancellor Angela Merkel reaffirmed Friday
that domestic GDP growth this year will likely be around 3% but warned
of risks from global economic trends.
Speaking at an industry conference here, Merkel said German
economic growth “will be surely rather closer to 3% than to 2.5%.” The
government’s standing forecast is +2.6%.
Still, the chancellor reminded that “since the crisis we know that
we are very vulnerable due to our close integration in global markets.”
Noting that around 60% of German exports go into the European Union,
Merkel said that “Germany can prosper over the medium term only if
Europe prospers as well.”
“That is why I cannot stop repeating that the euro must remain
stable,” Merkel said. “Everything which helps to defend the euro must be
done, everything that goes against this goal must be avoided.”
The latter remark can be seen as a rebuke to Economics Minister
Philipp Roesler, who heads the junior coalition partner FDP, for
publicly speculating about an orderly default of Greece.
The chancellor once again rejected the idea of joint eurobonds to
counter the crisis. “There won’t be any eurobonds,” she vowed. Issuing
such bonds would set the wrong incentives, Merkel argued. “Nobody would
make any effort anymore” to consolidate budgets; “this must absolutely
be prevented.”
Merkel warned against believing that the Eurozone debt crisis could
be solved with one big bang. “Rather, it will take a controlled process
of consecutive steps,” she insisted.
While Germany’s public deficit this year will likely amount to only
1.5% of GDP, “budget consolidation will remain the top priority,” the
chancellor said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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