“Stop the finger-pointing” – the call from German Chancellor Angela Merkel who has been praising the efforts of eurozone countries fighting the debt crisis.
She told the annual conference of Germany’s main employers’ association that Spain’s government is working with drive and commitment to improve its competitiveness and Greece’s economic overhaul is on track.
Speaking after her recent visits to Spain and Greece, Merkel said: “You can say all kinds of things about Greece, but there’s also a lot of movement there. It has been slower than we might have liked, maybe not as efficiently as we might have liked, but overall, there is a change in the way of thinking.”
Stressing that ending the debt crisis is “a good investment” for Germany and Europe, Merkel urged other countries to become more competitive, warning otherwise the common currency will not be able to “resist external shocks.”
Tax cuts to boost growth
In the same speech Merkel said Germany needs to stimulate domestic economic demand and urged opposition parties to stop blocking proposed tax cuts in the upper house of parliament.
Merkel told the business leaders Germany should end the automatic progression of workers into ever higher tax brackets due to inflation, which siphons more than 20 billion euros out of the economy each year. She also renewed her calls for cuts in pension contributions as another way to boost purchasing power.
“Growth in Germany can at the moment be stimulated by an increase in domestic demand more than anything else,” she said.
Germany has come under pressure to boost domestic demand to relieve pressure on the eurozone’s struggling periphery during the sovereign debt crisis.
Merkel has also encouraged German firms to give their employees higher wage increases this year.