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Germany: Merkel says no to spending Europe's way out of crisis02:05

Germany: Merkel says no to spending Europe's way out of crisis

Germany, Berlin
June 25, 2013 at 20:43 GMT +00:00 · Published

Germany: Merkel says no to spending Europe's way out of crisis

German Chancellor Angela Merkel advocated for a more coherent European Union in a speech given at the 50th anniversary of the German Economic Council in Berlin on Tuesday. Acknowledging the threat from the Left/Green coalition in the coming German elections in September, Merkel set out her vision on EU policy if she would be re-elected, saying that public spending is not a viable route out of economic depression without a guarantee of increased growth.

According to Merkel the EU lacks decision-making and a common vision to solve the economic crisis. She spoke in favour for more coordination in the European banking sector, with the establishment of a European Banking Union to recover investors' confidence in the Eurozone.

"Lots of countries do their best to improve their competitiviness, but at the end they are not able to do it cause they do not get any credit, which are really urgent, or at least no credit with payable interest," said the Chancellor. "Therefore, Wolfgang Schauble decided together with Philipp Rosler to reorganise the offer of our credit. Therefore we will have to talk with the European Investment Bank. But actually, a good credit assignment can only work if there is trust in the whole European bank system, provided with a common ground of the work of a bank union."

Merkel explained that negotiations between the heads of the EU member states can be difficult and illustrated this by setting out the different visions towards how to achieve economic growth in Europe. Just like the president of the European Central Bank Mario Draghi did earlier on Tuesday she focused on the importance of structural reforms to increase competitiveness. The Chancellor believes that countries have to take their responsibility and lower their debts.

"Why should budget consolidation and growth be contradictory?" asked Merkel. "There is an opinion that only public investment leads to growth, and I absolutely disagree with this thesis, that is not true. Public investment can help, there's no doubt about it, in infrastructure, in education and other fields, but the real motor of growth is a prosperous economy, an economy that creates employment, from which generate taxes".

"We know in Germany that if our economy is to be stable, Europe's economy must also be stable in the medium term. We export 60% of our goods to Europe, 40% in the Eurozone countries. Germany has an interest in Europe becoming more competitive and stronger."

Before Merkel started speaking, Kurt Lauk, the president of the Economic Council told the about 2,700 delegates that 90% of the members would like Angela Merkel to continue as Chancellor after the German general elections.

Germany: Merkel says no to spending Europe's way out of crisis02:05
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Germany: Merkel says no to spending Europe's way out of crisis

German Chancellor Angela Merkel advocated for a more coherent European Union in a speech given at the 50th anniversary of the German Economic Council in Berlin on Tuesday. Acknowledging the threat from the Left/Green coalition in the coming German elections in September, Merkel set out her vision on EU policy if she would be re-elected, saying that public spending is not a viable route out of economic depression without a guarantee of increased growth.

According to Merkel the EU lacks decision-making and a common vision to solve the economic crisis. She spoke in favour for more coordination in the European banking sector, with the establishment of a European Banking Union to recover investors' confidence in the Eurozone.

"Lots of countries do their best to improve their competitiviness, but at the end they are not able to do it cause they do not get any credit, which are really urgent, or at least no credit with payable interest," said the Chancellor. "Therefore, Wolfgang Schauble decided together with Philipp Rosler to reorganise the offer of our credit. Therefore we will have to talk with the European Investment Bank. But actually, a good credit assignment can only work if there is trust in the whole European bank system, provided with a common ground of the work of a bank union."

Merkel explained that negotiations between the heads of the EU member states can be difficult and illustrated this by setting out the different visions towards how to achieve economic growth in Europe. Just like the president of the European Central Bank Mario Draghi did earlier on Tuesday she focused on the importance of structural reforms to increase competitiveness. The Chancellor believes that countries have to take their responsibility and lower their debts.

"Why should budget consolidation and growth be contradictory?" asked Merkel. "There is an opinion that only public investment leads to growth, and I absolutely disagree with this thesis, that is not true. Public investment can help, there's no doubt about it, in infrastructure, in education and other fields, but the real motor of growth is a prosperous economy, an economy that creates employment, from which generate taxes".

"We know in Germany that if our economy is to be stable, Europe's economy must also be stable in the medium term. We export 60% of our goods to Europe, 40% in the Eurozone countries. Germany has an interest in Europe becoming more competitive and stronger."

Before Merkel started speaking, Kurt Lauk, the president of the Economic Council told the about 2,700 delegates that 90% of the members would like Angela Merkel to continue as Chancellor after the German general elections.

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