Merkel sets limits on economy rescue spending

The German Chancellor has again warned that she will not write blank cheques to save her country’s economy.

Angela Merkel said EU nations should not compete with each other to see who can provide the biggest stimulus packages.

She told parliament: “2009 will be a year of bad news, but we can use it to build a bridge to 2010 which should be much better. That is my government’s view, and that of the majority of this parliament.”

Merkel’s cabinet approved measures aimed at generating about 50 billion euros in new investments earlier this month. But the opposition and some members of her own party said it was an inadequate response and urged her to cut income and sales taxes. So far, it seems the lady is not for turning.

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