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Merkel refutes Obama on G20 fiscal policy

AFP · 19 Jun 2010, 15:26

Published: 19 Jun 2010 15:26 GMT+02:00

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Referring to the G20 summit in Canada next weekend, Merkel said in a videotaped message that "we are going to discuss when to quit the phase of short-term measures and go on to lasting budget consolidation."

Such a move was "urgently necessary, in the view of the Europeans and particularly of Germany," she said.

Obama urged the world's leading economies Friday to avoid scaling back government spending too quickly or risk derailing the global recovery.

"We worked exceptionally hard to restore growth; we cannot falter or lose strength now," Obama said in a letter to G20 leaders ahead of a June 26-27 summit in Toronto.

"Our highest priority in Toronto must be to safeguard and strengthen the recovery," Obama said in the letter dated June 16, but released Friday amid concerns about the pace of the global recovery.

The warning - a clear shot at European governments reining in budget deficits - comes after months of worry about the health of the eurozone, fuelled by huge public debts in Greece and Spain.

Germany, Europe's biggest economy, is working on a multi-billion-euro package of spending cuts worth designed to bolster government finances and recoup market confidence.

But those moves have led to US concerns that the global recovery - from the worst slowdown in decades - might be stopped in its tracks by withdrawing

government stimulus.

Obama also expressed concern about "weak private sector demand and continued heavy reliance on exports" by some nations within the G20, in a clear reference to Germany.

Merkel retorted Saturday, "We know of course that the European Union must make its contribution to ensure lasting world economic growth," but added, "We believe we have put the stresses on the right spot."

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"Europe will make its point of view clear at the G20," she warned.

She also said that the European Union would "pledge at the G20 to develop a worldwide tax on financial transactions," even though there were doubts about

its feasibility.

"There will certainly be controversy," she added.

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Your comments about this article

02:39 June 20, 2010 by Eagle1
Good job, Angela. At least you know when to stop spending. Obama-the-Idiot thinks money grows on trees. I can't wait to get rid of him.
05:54 June 20, 2010 by Swigera
Recovering from said crisis seems to hurt average people more than those who caused the problems in the first place. I guess ya'll deserve what you get when you let people do whatever they want.
08:49 June 20, 2010 by SDogood
It's about time the good chancelor starts ignoring that Marxist meathead. Of course Obama wants other countries to spend themselves into the poorhouse and devalue their currency as much as the dollar. Chancelor Merkel should never allowed herself to be pressured from the Obama administration to bail out Greece. But look what happened...the Euro and Obama's approval rating are racing to the basement! The government is NOT the answer...give people more of their own money through tax cuts and they will spend! A proven method from Kennedy to Reagan.
09:05 June 20, 2010 by JohnnesKönig
@SDogood you have spoken well! despite the high taxes in Germany, it is still a very strong economy. Imagine if taxes were cut! "Marxist meathead" hehe
10:20 June 20, 2010 by So36
You might disagree with Obama's policies but calling him Marxist is like calling Reagan fascist. It's just dumb and it's the kind of inanities that have crippled political discourse in America right now.
20:50 June 20, 2010 by JohnnesKönig
@So36 Obama is much closer to a Marxist than Regan would ever be to a fascist! Not only do I disagree with his policies but do a majority of the US citizens. And you can expect that number to increase! And for what it may be worth, (probably nothing) the "political discourse" in America has been crippled for many years now. I believe Germany and the rest of the free world could learn far more from Regan's policies than they could from the worst president since Jimmy carter! And at the rate he is going, he will surpass Carter!
23:29 June 20, 2010 by So36
That was my point. Neither of them are. But you obviously have no idea what a Marxist really is. And George W. Bush was the worst US president since Andrew Johnson.
01:35 June 21, 2010 by Prufrock2010
JohnnesKönig --

Clearly you don't know anything about Reagan (as you can't even spell his name correctly) or Obama, or the state of the American economy since Reagan was elected. Reagan, while dedicated to union busting, paved the way for the elimination of the middle class in America. At the same time he tripled the CUMULATIVE national debt from the inception of America to his last month in the presidency. GW Bush followed that example by creating the largest budget deficit in the history of the industrialized world while at the same time presiding over a global economic meltdown that his successor (in this case Obama) inherited and had to try to reverse. Simultaneously, Bush got the US and its "coalition of the willing" into an illegal, obscene and unwinnable war in Iraq based on lies, ignored what he had begun in Afghanistan to the point that it, too, is a lost cause, and recruited more terrorists than anyone could have imagined through his regime of authorized torture. As all this was going on, he was busy deregulating the financial and energy industries so that now the taxpayers are left with the burdens imposed by the likes of Goldman Sachs, AIG, Washington Mutual and most recently BP. This is just a small part of the nightmare that Obama inherited. By comparing Obama to a Marxist, you demonstrate that you know nothing of Marxism. And by the way, Obama's ability to jawbone BP to agree to put $20 billion into an independently administered escrow account to compensate its victims in the Gulf Coast is nothing short of genius, as it will help thousands of people recover financially without having to undergo 20+ years of litigation after their livelihoods have been destroyed in their futile attempts to be made whole.

Another point: America has the lowest tax rates in the industrialized world, and Obama's proposed tax increases on the wealthy would simply rescind Bush's tax breaks for the top earners and restore the tax structure that existed quite successfully under the Clinton Administration.

Germany avoided much of the financial chaos created by Bush, and Merkel would be well advised to pay attention to Obama's suggestions. Most responsible economists agree that hawkish fiscal austerity on the part of Germany during this time of cutbacks and stagnation would have serious negative consequences. Read Paul Krugman for more on this subject.
05:06 June 21, 2010 by Major B
@So36 and the good Prufrock2010_ So hard to avoid the ignorance and name calling of the unmentionable above. Good point So36. Great summary Prufrock2010. So easy to forget the US economic policies of 2001 - 2008 that created such most of the mess the US faces. Don't want to go further into that bad dream/movie. And for some ignorant ass to just willy-nilly through names out like "marxist meathead". I've mentioned before the RWKD(Right Wing Kook Disease) that infected many during the above mentioned years. They're still rabid, throughing their crap out, doing the standard "double standard" talk and hoping the uniformed will listen to words instead of FACTS. Latest example - Oh Yeah, apologizing to the International Oil Companies.

Maybe the good Chancelor is right. I admire the Iron Chancelor and think she is a role model for women everywhere. Recommend she take her vacation in a country other than Greece though. Do the European Heads of Government get that "30 day" annual vacation too? Bet the meatheads above have no idea how Europeans "work to live" and how Americans "live to work".
15:48 June 21, 2010 by Henckel
I'm glad Merkel is finding her voice and telling Obama that the EU can't engage in the kind of brainless spending the USA has long indulged in.
16:22 June 21, 2010 by Prufrock2010
You mean the brainless spending that began on January 21, 2000? I agree.
18:18 June 21, 2010 by Beachrider
For the record, Germany has a higher debt ratio when scaled to its Economy-size (GDP). As recently as the Clinton administration, the USA was looking to have a dramatically-low debt profile.

It is hyperbole to call Obama a Marxist, that is just a fact. No one should take the bait to further that discussion.

I love the admiration of Merkel now. Wait until you hear about her vigor for regulation that she will propose. Whether one believes that we need new regulations or not, it is clear that the laissez-faire approach from the Bush43 years will be replaced with a more-active regulation mechanism. That 'train' is unstoppable.
18:47 June 21, 2010 by derExDeutsche

After 8 years of Bush, America needed a change. Europe, well duh, LOVED Obama. Change of Party, change of direction. America agreed, kind of. Well, EUROPE, WORST PRESIDENT EVER!!! THANKS For the Endorsement!!!

And if THAT weren't bad enough, the Kook Media, lead by the New York Times, won't even report half the hornets nests he stirs. But don't worry, all foramlities will be done away with once the Govt. own the NYT outright. 'Pravda' , anyone?

G.W. Bush, would have had a Time Life Collection, and a slew of Propumentaries already in the works.

Now the BIG EnvironMentalist in the Oval Office wants to tax us based on carbon usage. Fannie Mae, who is now DE-LISTED!!! OWNS THE PATENTS TO THE DEVICE they will install in US homes. No real plan, just tax. Tax, Tax, Tax, Social Justice. in that order.

Get over it Progressives, after Obama, your arguments are DEAD. Before, we gave you the benefit of the doubt, but, ITS OVER NOW KOOKS! You've been exposed.

18:54 June 21, 2010 by Prufrock2010
It must be wonderful to live in such a benighted universe, never having to think an original thought or take the time to separate fact from fiction. Just sit back and get all your "facts" from Glenn Beck until your vapid head explodes.
19:04 June 21, 2010 by derExDeutsche
Tell us, Prufrock,




19:42 June 21, 2010 by Prufrock2010
1. The markets collapsed in 2008.

2. The policies were put in place (or rather deregulation was put in place) by the administration of George W. Bush with the help of Texas Senator Phil Gramm, who engineered the repeal of Glass-Steagall, a banking regulation that had worked quite well since 1933.

3. Fannie Mae and Freddie Mac were unregulated by the Bush administration for 8 years.

Consider yourself enlightened.
11:58 June 22, 2010 by derExDeutsche
Petro-Bras. Those watching what is happening in the bonds(bonos) tonight know...

Don't come talking your caveman socialist shyte. make a point. there is some SERIOUS STUFF going on in the world right now. Maybe the biggest shift since WWII.

but no, Prufrock is so smart he's stuck in '92..
17:01 June 22, 2010 by Beachrider
Mr. ExDeutsche,

Have fun with this format if you like, but the ad-hominem comments in every post make it look like you aren't listening and aren't serious.

We are undoubtedly in an economic shift. The housing market in the US is going to double-dip, but it doesn't appear that the broader economy will (so far).

It would only be arguing with you to assign a simple cause, but the time-line cannot be argued. This was born of the September 2008 cash-crunch.

If we can at least agree on that, that would be a big accomplishment.
18:50 June 22, 2010 by Prufrock2010
Those who can't understand the difference between regulated capitalism and socialism cannot be reasoned with. If the stark lessons of unregulated laissez-faire neo-liberalism have not been learned in the past 10 years (not to mention since April 20, 2010), there is no hope that they will ever be learned. I'm more interested in the opinions of economics scholars outside of government than I am in the bumper-sticker sloganeering of a blowhard who claims to own a hotel in some banana republic.

I'm not stuck in '92. I'm just watching Bush's chickens coming home to roost. Big time.
19:22 June 25, 2010 by aelfheld
"You might disagree with Obama's policies but calling him Marxist is like calling Reagan fascist. It's just dumb and it's the kind of inanities that have crippled political discourse in America right now. "

Actually, it's split-the-difference idiots like you that have 'crippled political discourse in America'. You refuse to admit the truth about the damage BHO is doing to the US and its allies, becoming a willing participant in the destruction. If it looks like a duck, walks like a duck, and quacks like a duck, the odds are high that it's a member of the Anatidae family. If BHO isn't a Marxist, he'll do until one comes along.

FYI, fascism is a trope of the Left ('right-wing, or national, socialism'), so by definition Reagan was not and could not be a fascist.
00:15 June 27, 2010 by Prufrock2010
Reagan wasn't a fascist. He was just a right wing tool.
01:53 June 29, 2010 by wxman
The left is on the defensive, so maybe things will right themselves. Cause for minor optimism.
00:06 June 30, 2010 by Prufrock2010
The left is always on the defensive. It's the right you have to worry about.
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