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Merkel calls for joint action to stem crisis

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Merkel calls for joint action to stem crisis
Merkel and Brown at 10 Downing. Photo: DPA
19:20 CET+01:00
Chancellor Angela Merkel called Thursday for urgent coordinated action to ease the impact of the financial crisis on the mainstream economy, but said new jobless data gave a glimmer of hope.

Speaking at a joint press conference with British Prime Minister Gordon Brown after talks in London, she said Europe needs to work closely with the United States to avert further damaging fallout from the credit crunch.

"We have a very positive development on the labour market in Germany right now," she said, referring to new figures showing German unemployment fell below three million in October for the first time for 16 years.

"We do not as yet see the impact of this dark cloud looming on the horizon. So we now have to react quickly to ward off any further danger," she told reporters. "I totally agree with Gordon Brown .. we have to resort to national measures, European but also global measures."

The German figures were a rare piece of good news: the unemployment rate fell to 7.2 percent from 7.4 percent in September, with 26,000 fewer people registered as seeking work in the biggest European economy.

Brown also hailed the data as a "remarkable achievement," but stressed the need for reforms, notably urging the International Monetary Fund to play a bigger role in preventing the crisis spreading.

"This is a global problem that requires a global solution. No country, no matter how big, can solve these problems on their own," he said.

The talks came two days after a visit by Brown to Paris to discuss Europe's response to the crisis with French President Nicolas Sarkozy, current holder of the rotating European Union (EU) presidency.

World leaders are scrambling to prevent a crisis which started with a credit crunch in the United States from spreading into the so-called "real economy" of jobs, prices and livelihoods.

But there have already been widespread signs of the slowdown, ranging from job cuts to property price slumps, and a series of meetings are scheduled in the coming weeks in a bid to coordinate policy.

EU leaders are to meet in Brussels on November 7 for an "informal lunch" to prepare for a November 15 summit of the Group of 20 (G20) in Washington on the crisis.

As well as meeting Brown, Merkel also held brief talks with Queen Elizabeth II at Buckingham Palace. Afterwards she said it was "a great honour and privilege to be invited by her."

Germany's Handelsblatt business daily said Merkel's trip could be seen as part of a power play between key EU states Britain, Germany and France. "While Merkel was celebrated internationally as a central EU figure a year ago, she seems strangely pale these days in comparison to Sarkozy," it said in an editorial. "Thus her trip to London appears to be an attempt to move out of his shadow."

But it added: "The silly thing is that any competition with Sarkozy is like the fable of the hare and the tortoise," noting that Britain's Brown already met Sarkozy in Paris on Tuesday.

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