Merkel defends 500 billion bail out

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Merkel defends 500 billion bail out

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German Chancellor Angela Merkel has strongly defended her governments bail out blueprint to save Germany’s financial sector.

Yesterday, Merkel announced a 500 billion euro safety package, but the plan has met widespread political hostility in Germany’s federal states.

“Credits are the source for investments, economic growth and jobs and therefore there was no alternative to our bail out plan yesterday,’‘ said the German Chancellor.

Under the present rescue deal Germany’s regional governments will be expected to cough up 35 percent.

Something Bavarian Prime Minister in waiting Horst Seehofer finds hard to digest. He’s afraid it’s going to leave little in the pot.

“If we have to bring up that much money for the package, we will lose for a very long time any financial leeway,’‘ he said.

As German’s regional heads struggle to come to terms with their contribution, the country’s leading think tanks have warned Germany is on the brink of recession.

Car makers and exports are expected to be hardest hit with growth at around 0.2 percent for 2009.