ECB economist defends German austerity measures

16th June 2010, Comments 0 comments

European Central Bank chief economist Juergen Stark defended Germany's position on debt measures and growth stimulus against pressure from the United States in an interview to appear on Thursday.

Stark was asked by the German magazine Die Zeit to comment on remarks by US Treasury Secretary Timothy Geithner. who has urged Germany to encourage domestic consumption.

"The United States made similar requests in the 1970s," noted Stark, who is German.

"The result was a flash-in-the-pan without a sustained effect on growth. We must learn from these experiences."

He expressed support for a German austerity plan presented last week by Chancellor Angela Merkel, saying it put the country "on the right path."

The United States and some European countries say Germany, the biggest European economy, should increase consumption to underpin growth that depends largely on exports.

But Stark said that "we must not punish those who make a great effort to adapt to international competition."

He added that he did not perceive an "export-oriented policy on the part of the government" and that success in that area was the result of work by German companies themselves.

"Those who should correct their policies first are states with current account deficits. They have lived beyond their means," Stark said.

© 2010 AFP

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