Germany drafts recipe for EU growth, warns Greece | News | DW | 11.05.2012
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Germany drafts recipe for EU growth, warns Greece

Foreign Minister Guido Westerwelle has called for a new approach to spending that boosts growth without increasing debt. He also warned that Greece can expect help from the EU, but only if it sticks to its commitments.

In a speech to Germany's lower house of parliament, the Bundestag, Westerwelle on Friday unveiled a six-point plan to boost European economic growth. It includes stricter controls on spending and putting around 80 billion euros in EU funds into increasing the bloc's competitiveness. But the liberal FDP party politician said he rejected the idea of government stimulus to boost growth.

"One cannot buy growth by incurring new debt," he said, adding that "the European Union cannot spend more than before, but it must use its means better than it has so far."

The six-point plan from Westerwelle is meant to complement the EU fiscal pact, which requires governments to take steps to rein in public debt.

Germany's opposition expressed skepticism, with the Social Democrats criticizing the lack of measures to tackle high youth unemployment and the Left party calling for tax increases for the wealthy.

No plan to budge on fiscal pact

In an apparent reference to presidential elections in France, Westerwelle stressed Germany would not renegotiate the eurozone's fiscal pact, which requires governments to take steps to rein in public debt. Socialist President-elect Francois Hollande made redrafting the agreement one of the pillars of his campaign.

Guido Westerwelle speaks in the Bundestag

Westerwelle rejects increasing debt to boost growth

"The fiscal pact was agreed, and it remains valid," Westerwelle said. "Agreements between states do not become invalid through new elections."

Westerwelle also took the opportunity to issue a warning to Greece, where politicians are anxiously trying to build a viable government coalition. In Sunday's election, voters there punished the mainstream parties over austerity measures implemented as part of an EU-IMF bailout. If they fail to form a coalition to uphold Greece's international commitments, Athens could renege and become insolvent, putting at risk its membership in the eurozone.

"The future of Greece in the eurozone lies in the hands of Greece," Westerwelle said. "We want to and we will help Greece, but Greece has to be ready to accept help. If Greece strays from the agreed reform path, then the payment of further aid tranches won't be possible. Solidarity is not a one way street."

Earlier, Finance Minister Wolfgang Schäuble said in an interview with the Rheinische Post newspaper that Europe would survive if Greece decided to exit the euro.

"We want Greece to remain in the eurozone," Schäuble said. "But it also has to want this and to fulfill its obligations. We can't force anyone. Europe won't sink that easily."

ncy/al (dpa, DAPD, Reuters, AFP)