Merkel rejects calls for new stimulus package

Merkel rejects calls for new stimulus package
Photo: DPA
German Chancellor Angela Merkel reiterated Friday that she did not favour a new package of economic stimulus measures US officials have called for as world leaders prepare for a G20 meeting in London.

“We do not think much of the idea of a new package of measures” to underpin the economy, Merkel told a press conference in southern Munich after a meeting with employers.

Splits have emerged ahead of a meeting in London Saturday of Group of 20 finance chiefs, with the United States and Japan backing more stimulus spending and European leaders pushing tougher regulations as the best way out of the global economic crisis.

The G20 group of developed and emerging economies are later to discuss measures to get their economies back on track at an April 2 summit in the British capital. Countries like France and Germany feel they have already drawn up substantial stimulus packages, with Berlin drafting two plans worth a total €81 billion ($104 billion).

On Thursday, Merkel and French President Nicolas Sarkozy said in Berlin that they were not prepared to enlarge their packages further.

“The problem is not about spending more, but putting in place a system of regulation so that the economic and financial catastrophe that the world is seeing does not reproduce itself,” Sarkozy told a joint press conference. “We consider that in Europe, we have already invested considerably.”