German Chancellor Angela Merkel is resisting calls for a relaxation of the austerity drive she has prescribed as a remedy for the eurozone debt crisis.
Emboldened by Socialist François Hollande’s election as French President, her centre-left opponents at home and in Europe have urged economic stimulus policies that rely on new debt. Merkel, however, is having none of it.
“Growth based on borrowing would just push us right back to where we were at the beginning of the crisis and that is why we should not and will not do it,” she told the Bundestag lower house of parliament.
“The only sustainable path is to accept that getting over the crisis is a long, strenuous process which will only succeed if we tackle the causes of the crisis – which are the horrendous debt and the lack of competitiveness of some euro zone states.”
The conservative Chancellor did say that growth through structural reforms is “sensible, important and necessary.”