EU split over response to economic woes

Europe’s deepening economic problems dominate the EU summit in Brussels. But big differences of opinion have emerged on how to respond. Germany has criticised countries for rushing into untested economic rescue packages,but in Brussels Chancellor Angela Merkel took a more conciliatory tone.

She said: “We support all necessary efforts to stimulate and strengthen the economy, we support the European Commission’s proposal to devote 1.5 percent of Europe’s gross domestic product to that. We think every country should do what it thinks necessary. Germany has already taken a first step. On that we’re in full agreement with the Commission. The most important thing for us in Germany is protecting jobs.”

Moves by British leader Gordon Brown have not found favour with Germany’s Finance Minister Peer Steinbrueck. Brown’s decision to slash value added tax in the UK was strongly criticised by Steinbrueck in an interview with Newsweek magazine. He said: “All that will do is raise Britain’s debt to a level that will take a whole generation to work off.”

A Brown ally, former Treasury specialist Ed Balls, replied that Germany’s ability to respond to the global economic downturn is being hampered by domestic politics. He added: “Once the politics in Germany is resolved they will be acting with us too.”

Copyright © 2009 euronews

tags: Economy, Europe, Financial Crisis