'No pressure' from US on economic policy: German source

22nd June 2010, Comments 0 comments

The United States is not applying any pressure on Germany on economic policy, a government source in Berlin said Tuesday, amid reports of rifts between the two ahead of a crunch G20 summit at the weekend.

US President Barack Obama and German Chancellor Angela Merkel were "largely in agreement" on how best to move beyond the crisis during a pre-G20 phone call Monday, added the source, who did not wish to be named.

There was "no pressure" from Washington on the subject of economic policy, the source added, and the pair agreed on a "differentiated exit" from emergency stimulus measures put in place at the height of the financial turmoil.

Last week, Obama sent a letter to other world leaders in which he said he was "concerned by weak private sector demand and continued heavy reliance on exports by some countries with already large external surpluses."

He added that governments must "learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession."

Many viewed this as an attack on Germany, which has announced a huge austerity package worth at least 80 billion euros (98 billion dollars) between next year and 2014 and is the world's second biggest exporter after China.

However, the German source dismissed reports of a transatlantic spat.

"The Obama letter showed fewer differences (between Berlin and Washington) than have been reported," the sources said, adding: "We are in agreement."

On Monday, Merkel herself hit back at the perceived criticism, saying the package was "not about a radical savings programme" and stressing the measures would foster sustainable growth by investing in areas such as education.

"I think that when we explain this, no one will be able to say that we are not doing enough for growth," she said.

© 2010 AFP

0 Comments To This Article