European Central Bank official calls for bigger German stimulus package
20 Nov 2008
A European Central Bank policy-maker has called upon Germany to launch an even more ambitious economic stimulus package as part of a unified European response to the growing economic crisis.
The Financial Times quoted Ewald Nowotny, Austria's central bank governor, as saying that a speedier and more aggressive action to arrest a recession in eastern Europe. The European Commission is exoected to announce an EU-wide economic recovery programme in about a week, by inviting the 27 EU-member states to initiate fiscal stimulus packages of their own, as determined fit by each government's budgetary constraints.
The report said the European Commission too is widely expected to propose faster spending of aid for poorer regions of the EU, which will include central and eastern Europe. The stimulus package is expected to include remedies for car and constructions industries as well.
Meanwhile, German government officials have said that the European Commission is working with its 27 EU members on a €130 billion ($164 billion) stimulus package to beef up the region's economy. Anne-Kathrin Roethemeyer, a spokeswoman for German economy minister Michael Glos went on record confirming a report by Spiegel magazine, which said EU states would be asked for contributions of around one per cent of their gross domestic product (GDP) to fund the stimulus package, saying that it was the subject matter of current discussions.
By that token, Germany would need to contribute around €25 billion, which is around one per cent of its €2.4 trillion economy. The commission is expected to approve the plan on 26 November, and it would be put to vote by European leaders at a summit scheduled for 10 December, according to Spiegel. According to forecasts by the German government, the country's economy will most probably not see any growth at all in 2009. Germany is the EU's largest economy.
A €50 billion package that had been approved by Chancellor Angela Merkel's government on 5 November "may or may not be figured'' in the EU's calculation, according to reports, even though the Financial Times Deutschland quoted Merkel's chief spokesman Ulrich Wilhelm as saying that the earlier package will be part of the Commission's calculations.
