Merkel Steps Up Defense of Budget Agenda, Targets Excessive Debt

Chancellor Angel Merkel stepped up her budget-cutting message in the face of rising criticism of Germany’s focus on austerity, saying that excessive debt robs states of their ability to make independent decisions.

Referring to euro-area countries shouldered with too much debt, Merkel told supporters in the northern German state of Schleswig-Holstein that certain nations had themselves brought on austerity by spending more than they raised in revenue.

Too much debt “harms countries’ ability to make their own decisions, so that they’re more and more dependent on the markets, and have to step up savings and make harsher cuts,” Merkel told a campaign rally today in Flensburg on the Danish border. Schleswig-Holstein holds an election on May 6.

Merkel stressed her defense of consolidating budgets as the best way to resolve the two-year-old debt crisis even as the focus in Europe shifts away from austerity to promoting economic growth. Francois Hollande, the French Socialist presidential election front-runner, is leading a chorus of politicians and economists to take issue with Germany’s debt focus.

Merkel meanwhile backed a call made yesterday by European Central Bank President Mario Draghi for a “growth compact” to follow the fiscal pact.

“Many people are saying that if we save, then we’re going to have a lot of difficulties,” Merkel said at the rally. “If you save at the right time, if you save logically, if you undertake structural reforms,” disciplined budgets “will lead you to economic strength, growth, good conditions for businesses, less bureaucracy and more jobs.”

Merkel came to back her Christian Democratic Union party’s candidate to lead the state, Jost de Jager, as polls suggest that her CDU may lose power in Schleswig-Holstein.

The chancellor compared a government’s fiscal policy with spending in a family household.

“That’s actually something that all of you do at home,” Merkel told voters in a central square in Flensburg. “Every one of you knows that you have to live off of what you earn.”

To contact the reporter on this story: Patrick Donahue in Flensburg, Germany via

To contact the editor responsible for this story: James Hertling at

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