Merkel-German govt to stick to austerity programme

BERLIN, June 24 (BestGrowthStock) – German Chancellor Angela Merkel
said her government would stick to its austerity programme and
said a record federal deficit of 80 billion euros this year
meant there was no scope to relax.

In an interview with German TV ARD broadcast on Thursday
morning, Merkel also dismissed criticism that Germany is not
doing enough on economic stimulus measures. She said Germany
spends about 2.1 percent of its gross domestic product to
reinforce economic growth.

Merkel said the government would stick to its austerity
programme even though some leaders of her junior coalition
partners, the Free Democrats, have called for tax relief.

“We’ll enact the measures that we’ve agreed upon,” Merkel
said. “I believe we should not let up.”

Merkel said a federal deficit of 80 billion euros deficit
this year in a budget totalling 320 billion euros made it
imperative to continue looking for ways to reduce the deficit.

“Eighty billion euros in a budget of 320 billion euros —
it would benefit everyone if we can save another 10 billion
euros next year if the economy picks up,” she said, pointing
out that would cut interest costs for future generations.

“I think one should be pleased with that but not let up as
far as structural cost-cutting is concerned,” she said.

Merkel said she had told U.S. President Barack Obama in a
phone call that Germany has done much to support economic
growth with stimulus measures. Despite the austerity programme,
she said Germany has done much to support a recovery.

“Germany is doing much more in 2010 for the worldwide
economic recovery than (other countries) on average,” she said.

Economy Minister Rainer Bruederle had said on Wednesday on
Wednesday that tax cuts the centre-right government agreed in a
2009 coalition deal were only delayed recently and not

Bruederle, a member of the FDP, called for tax cuts for
middle income wage earners before the end of the current
legislative period that concludes in 2013.

Germany has launched its biggest programme of fiscal
cutbacks since World War Two and Finance Minister Wolfgang
Schaeuble has said it does not have the leeway to carry out
major tax reforms during the current legislature.

But there has been dissent within Merkel’s coalition over
the 30 billion euros in savings over the next four years on
welfare and slashing thousands of federal government jobs.

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(Writing by Erik Kirschbaum; Editing by Kim Coghill)

Merkel-German govt to stick to austerity programme