German minister in South Korea defends austerity

26th March 2012, Comments 0 comments

Germany's foreign minister on Monday defended his country's push for austerity to resolve the eurozone debt crisis and denied Berlin was seeking to dominate its European neighbours.

Guido Westerwelle, in South Korea for a nuclear security summit, hit back at criticism that Germany as Europe's biggest economy was failing to stand up for growth as it leads efforts to bail out debt-mired member states.

"We cannot fight a debt crisis simply by accumulating more debt, or by having one country take over the debt of another," he said, rejecting calls for an even bigger "bazooka" or "firewall" of cash to protect stricken states.

"We need to convince markets that the eurozone will be an area of financial stability in the future."

Westerwelle said Germany had served as an "anchor of stability" amid the market turmoil, ponying up 22 billion euros ($29 billion) in capital stock and guarantees of more than 200 billion euros for bailout funds.

"But the best and most sustainable means for growth are structural reforms and improved competitiveness in the member states, in such areas as pensions, infrastructure and employment," he said, in a speech at a Seoul university.

Beyond Europe's new fiscal pact creating stricter budgetary curbs, Westerwelle called for an expansion of the common European market to new sectors, fiscal policy that fosters competitiveness, and more free trade agreements like a pact signed between the EU and South Korea in 2010.

He cited tough reforms imposed on South Korea by the International Monetary Fund as a success story and an example for struggling European states, and denied Germany was exploiting the crisis for a power grab.

"We don't want a German Europe," he said. "We want a European Germany."

Westerwelle said the situation in Europe had "significantly calmed down since the New Year".

"Europe is a strong continent that will emerge from this crisis stronger than it was," he said.

Westerwelle also addressed the problems on the Korean Peninsula, where the two Koreas have remained divided since a war from 1950 to 1953.

He said Germany hoped it could use its own experience overcoming its Cold War division to "assist the people of Korea in their reunification in the not too distant future".

© 2012 AFP

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