Germany’s finance minister has said his country will stick to its austerity course despite mounting criticism and others in the eurozone should keep focused on cutting their budgets.
Philipp Roesler said Germany understood that it was difficult for individuals, companies and governments to continue reining in their spending but insisted that this was the right course.
The Economy Ministry has just revised slightly upwards its economic growth forecast for Germany to 0.5 percent this year and by 1.6 percent in 2014.
At the same time Chancellor Angela Merkel voiced worries over a possible interest rate cut by the European Central Bank saying it could harm the German economy.
Speaking at a banking conference in Dresden she said: “The European Central Bank is obviously in a difficult position. For Germany’s circumstances it would actually have to raise rates slightly right now, but for other countries it would have to do even more to make more liquidity available, and especially for liquidity to reach corporate financing.”
The eurozone’s economic weakness has been hitting German exports. That was underlined by the boss of Volkswagen, Martin Winterkorn, telling its annual shareholders’ meeting: “The coming months will be anything but easy.”
Except for North America and China, all regions were marked “by often significant uncertainty”, he said, adding that core European markets would remain “extremely weak” for the foreseeable future.
Europe’s number one carmaker reported a 26-percent drop in first-quarter operating profit to 2.34 billion euros, though it stood by goals to match last year’s record earnings of 11.5 billion euros and to push sales and deliveries to new records “despite all the economic uncertainties”.
“Regardless of whether we’re in an upturn or downturn, it’s our goal to ensure that VW reaches the top of the automotive industry by 2018,” Winterkorn said.