German Finance Minister Wolfgang Schäuble defended the government's rigid budgetary policy on Tuesday, repudiating opponents' claims that a balanced budget was more important to him than growth at a time when Germany's economy was in peril.
"We are not in a recession. We are not in an economic crisis," Schäuble said during a budget debate in Germany's lower house of Parliament, the Bundestag. "Our economy is almost working at normal capacity."
Germany narrowly avoided a recession in the third quarter, growing by 0.1 percent, official data showed Tuesday, bolstered by higher consumer spending and strong exports thanks to a weaker euro.
Berlin is looking to balance its budget next year for the first time since 1969, but its insistence on avoiding new debt has isolated it from weaker eurozone members.
No 'loose talk'
Earlier this month, the European Commission cut its growth forecast for the eurozone, calling on Germany to invest more to help the 18-member bloc out of its slump caused by economic downturn in France and Italy.
European leaders, including Italy's undersecretary for European Affairs, said those forecasts were proof that fiscal policies focused too heavily on budgetary discipline were misguided.
The conservative-led government of Chancellor Angela Merkel has consistently warned against falling back into pre-crisis habits of high spending to spur growth.
In the Bundestag, Schäuble conceded that the German economy was not growing as quickly as it could, but he also cautioned against "loose talk" that could encourage a crisis.
Also on Tuesday, Schäuble sharply criticized in a magazine interview companies that had exploited business-friendly tax laws in Luxembourg to dodge millions of euros in taxes.
"When certain groups do not pay their fair share of the public budget, then something's wrong," he told the magazine Focus.
cjc/uhe (Reuters, AFP)