Merkel: Germany Won’t Be Able To Decouple From Global Slowing

BERLIN (MNI) – German Chancellor Angela Merkel said Tuesday that
the outlook for Germany and Europe is uncertain and that Germany won’t
be able to decouple from the global economic slowdown.

“Germany is not an island, it cannot decouple from the rest of the
world,” Merkel said in a speech at a conference organized by the German
Industry Association (BDI).

It will still take a long time before the Eurozone debt crisis will
be fully overcome, the chancellor cautioned. “There still exists
distrust in financial markets if Eurozone countries will be able to
service their debt over the long term,” she remarked.

Merkel rejected calls for Germany to allow letting unit labor cost
in the country rise in order to reduce imbalances in the Eurozone.
Rather, other Eurozone member states need to lower their unit labor
cost, she urged.

German tax revenues are currently developing “very favorably,”
Merkel said. The country’s total budget deficit will likely amount only
to 0.9% of GDP this year, she said. The government is aiming to reduce
federal net new borrowing to zero by 2016 at the latest, she said.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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