Merkel urges EU to bury cliche of bullying Germany

Reuters News
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Posted: Jan 25, 2012 7:23 AM
Merkel urges EU to bury cliche of bullying Germany

BERLIN (Reuters) - Chancellor Angela Merkel rejected as "unfounded" stereotypes about a domineering, dogmatic Germany whose economic strength hinders growth in the rest of Europe, saying such cliches did not help the cause of European integration.

In a group interview for newspapers from Spain, Italy, Poland, Britain, France and Germany published on Wednesday, Merkel also reiterated that Berlin does not have unlimited resources to bail out the debt-ridden euro zone.

"There are lazy Germans and hard-working Germans, left-wing Germans and conservative ones. There are those who support competitiveness and those who want redistribution. Germany is just as varied as the rest of Europe. We should bury the old stereotypes," said the conservative German leader.

Merkel has been lampooned as a Nazi and a dominatrix in newspaper cartoons and protest banners across Europe but above all in Greece, for demanding fiscal discipline as a condition for international aid during the two-year-old euro debt crisis.

She will address assembled business leaders and policymakers at the World Economic Forum in Davos later on Wednesday.

Reiterating her caution about calls from the International Monetary Fund and Italy, among others, for Germany to beef up its contribution to euro zone bailout facilities, Merkel said: "It makes no sense for us to promise more and more money without tackling the causes of the crisis."

"No matter how much we support multi-billion aid and rescue schemes, we Germans have to be careful and not end up running out of strength - because we don't have unlimited resources either - and that would not help the whole of Europe."

Merkel also voiced reservations about calls from the United States, among others, for export-powerhouse Germany to help the rest of the European Union grow by reducing imbalances in its current account. Some economists say German wage restraint for example, dampens demand for imports in Europe's biggest economy.

Recent economic figures have suggested Europe's largest economy is shrugging off the sovereign debt crisis that has hammered growth in other euro zone countries.

COMPETITIVENESS

"Nobody would benefit from a weaker Germany. Of course in time we have to reduce imbalances in Europe, but we should do this by getting other countries to improve their competitiveness rather than Germany being weaker," said Merkel.

The chancellor cited the example of restrictive labor laws in Spain which she said contributed to a high youth unemployment rate of over 40 percent. The European Commission was welcome to use unallocated "structural funds" for reforms to boost growth and employment in Europe, rather than returning them, she said.

Merkel warned that markets were "testing our determination to stick together". On Britain, which opted out of her fiscal pact for budget discipline across Europe, the chancellor said she was convinced the British "want to remain part of the EU".

While it is inevitable that cooperation would be closer between members of the euro zone, the currency bloc should not isolate itself from opt-out countries like Britain, she said.

"Whether it be the Euro Plus Pact or the fiscal pact, every single member state which doesn't have the euro is invited to be part of the project," Merkel said.

(Reporting by Stephen Brown, editing by Gareth Jones and Toby Chopra)