Merkel protege says priority is to invest as economy stutters
BERLIN (Reuters) - The head of Germany's conservatives said on Thursday speeding up investment must be a priority as fears of recession in Europe's biggest economy grow, and that strict fiscal rules have flexibility built in so need not be abandoned immediately. Worries about a slowdown in Germany have prompted calls from some left-leaning politicians and even some in industry for the government to kick-start growth by ditching its balanced budget rule to finance more public investments.
BERLIN (Reuters) - The head of Germany's conservatives said on Thursday speeding up investment must be a priority as fears of recession in Europe's biggest economy grow, and that strict fiscal rules have flexibility built in so need not be abandoned immediately.
Worries about a slowdown in Germany have prompted calls from some left-leaning politicians and even some in industry for the government to kick-start growth by ditching its balanced budget rule to finance more public investments.
"Above all, we must invest in things. At the moment we have in the federal budget the means available for transport infrastructure or other things," conservative Christian Democrat (CDU) leader Annegret Kramp-Karrenbauer told n-tv.
Asked if it was time to abandon the balanced budget policy, she said experience showed that achieving a good economy was not incompatible with having a balanced budget.
She also said that existing rules enshrined in the constitution have exceptions built into them for times of crisis or emergency.
"Therefore we do not need to put to one side the principle in itself straight away," she said. Her spokeswoman said she was referring to the so-called debt brake which limits new debt, although she had referred to the balanced budget policy in her reply.
Her comments were slightly softer than those of some conservatives, many of whom see the balanced budget goal, introduced by former finance minister Wolfgang Schaeuble, as sacrosanct. The government has said there is currently no need for further measures to stabilise the economy.
Kramp-Karrenbauer, who took over from Chancellor Angela Merkel as head of the CDU in December, made clear that her priority was to tackle bureaucracy which was slowing down investment.
She acknowledged some other steps might be needed to reassure voters, welcoming a study by the labour ministry into a possible scheme for subsidies for workers whose hours are cut.
Data on Wednesday showed that the German economy contracted in the second quarter due mainly to a slump in exports, and few economists expect a swift recovery, raising the prospect of a recession.
(Reporting by Andreas Rinke; Editing by Peter Graff)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.