German Finance Minister Peer Steinbrueck says he doesn't know just how bad this biting recession is going to get. To round off a rough week, he also engaged in a battle of historical metaphors with the Swiss.
Finance Minister Peer Steinbrueck admits he doesn't know how bad it will get
German Finance Minister Peer Steinbrueck has warned that it might be necessary for the German government to once again cut the 2009 economic forecast.
In an interview with the daily Sueddeutsche Zeitung, Steinbrueck said it was possible they would not be able to keep economic contraction at 2.25 percent, but added that he couldn't say how low it might go. Some economists are predicting the economy could contract by up to 5 percent this year.
"We have no idea yet of the effect our economic stimulus plans will have," he added.
Berlin has approved two stimulus plans so far, together worth 81 billion euros ($109 billion).
Since October of last year, the German government has already twice cut its forecast for Europe's largest economy.
Then, Berlin had predicted 1.2 percent growth, despite the global credit crunch that had already started to make its way around the world.
Called out by the Swiss
The Swiss have been fighting to stay off a tax haven blacklist
Steinbrueck's troubles aren't limited to a contracting economy. In the ongoing debate about how to deal with banking secrecy laws, the German finance minister compared countries with these rules to the Native Americans in the Wild West.
"The cavalry at Fort Yuma doesn't always need to ride out, sometimes it's enough for the Indians to know that they're there," he said.
While Steinbrueck claims he wasn't specifically referring to the Swiss, many in Bern have taken the statement personally.
During a debate in Switzerland's parliament, Thomas Mueller, a member of Christian Democratic People's Party of Switzerland, said that Peer Steinbrueck has redefined the image of an "ugly German."
"He reminds me of that generation of Germans who, 60 years ago, walked through the streets wearing leather jackets, boots and arm bands," he added.
Tax havens, as well as financial regulation, will be discussed at an EU summit in Brussels on Thursday and Friday.