• Germany's news in English

Germany: EU austerity drive not over yet

AFP · 26 Aug 2014, 08:27

Published: 26 Aug 2014 08:27 GMT+02:00

Facebook Twitter Google+ reddit

Chancellor Angela Merkel praised Madrid's austerity drive during a visit to Spain and gave her powerful backing to the country's economy minister in his bid to lead the Eurogroup forum of finance ministers.

Merkel hailed Luis de Guindos' handling of the Spanish crisis, saying he was "an excellent economy minister in Spain in difficult times" during a joint press conference with Spanish Prime Minister Mariano Rajoy.
The German leader's support could be crucial in landing him the job, which would give the austerity policies favoured by Berlin a powerful defender in the European Commission.
Both Merkel and Rajoy, who have been allies in stabilizing the finances of heavily indebted Spain, defended the need for further austerity and economic reforms, saying this boosted economic growth.
"The public deficit and debt levels must be reasonable," Rajoy told the news conference in his northwestern home city of Santiago de Compostela.
"Structural reforms are sometimes hard, they are sometimes difficult and complicated to explain, but they boost economic competitiveness and levels of wellbeing and wealth and jobs."

Rajoy's government claims to have overseen something of a recovery in Spain's economy, which emerged last year from a double-dip recession sparked by a 2008 property crash.
"I share Mariano Rajoy's opinion regarding the combination of budget austerity and reforms," Merkel told the news conference.
The leaders' defence of austerity came as France lurched towards political turmoil after the country's firebrand Economy Minister, Arnaud Montebourg, criticized Germany's austerity drive and warned Paris would no longer "be pushed around" by the EU's economic powerhouse.
This led French President Francois Hollande to instruct his Prime Minister Manuel Valls on Monday to form a new government.
France's economy is stalling and its central bank warned this month that Hollande had no hope of reaching his target of 1.0 percent growth for 2014.
The French economy has been stagnant for the past six months and the government was forced to halve its growth forecast to 0.5 percent for this year.
'Tightening is much weaker'

Germany earlier this month snubbed a request from Hollande for an EU-wide shift of economic policy in order to encourage growth.
Since the start of the eurozone debt crisis in 2010, Germany has faced accusations that by failing to use its standing as Europe's biggest economy to do more to kickstart growth, it is leaving struggling partners in the lurch.
But European markets and bonds shrugged off the upheaval in France, boosted by comments last week from ECB chief Mario Draghi who suggested recent monetary policy measures would get the eurozone back on its feet.
Hollande and Italian Prime Minister Matteo Renzi have been especially vocal in calling for an easing of the fiscal austerity imposed by Germany.
Story continues below…
IMF chief Christine Lagarde, a former French finance minister, waded into the debate on Monday, saying in an interview that Germany should play a bigger role in propelling economic recovery in Europe.
"What I think is very important for Germany is to participate in the recovery movement in a very intense way. It has the means to do so," she told Swiss public broadcaster RTS.
"We have seen a process of very strong budget tightening over the past three years," she said, adding that "fortunately, in 2014 and 2015, this budget tightening is much weaker".

For more news from Germany, join us on Facebook and Twitter.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Parents who don't get nursery spot for kid entitled to pay
Photo: DPA

The Federal Court of Justice (BGH) ruled on Thursday that parents whose children don't receive placements in nursery care are entitled to compensation.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd