BERLIN, September 27, 2011 (AFP) – German Chancellor Angela Merkel hit back Tuesday at those, including the United States, urging Europe to introduce new economic stimulus packages to boost demand and spend its way out of the crisis. “We need to combine economic growth with solid public finances … we are not in favour of new stimulus programmes,” said the chancellor.
“The idea that you need to boost growth by taking on ever greater debt is the wrong idea. I am deeply convinced of that,” she said.
US officials have repeatedly called on European leaders to introduce further stimulus into their slow-growing economies in a bid to tame a crisis that President Barack Obama said Monday is “scaring the world.”
Merkel also called for greater efforts to push forward the stalled Doha round of global trade liberalisation talks, saying it would be “one of the cheapest economic stimulus packages.”
In a speech to business leaders in Berlin, Merkel insisted that the current crisis in the eurozone was not related to the common currency, but rather to the huge debt piles accumulated by euro area members. “We don’t have a euro crisis, but a debt crisis,” said Merkel.
She urged the assembled business elite to realise that “Ger