Merkel’s Distaste for Austerity Causes French Misunderstanding

German Chancellor Angela Merkel condemned using the term austerity to describe government efforts to cut deficits, saying that it sounds “aggressive” and doesn’t rule out parallel moves to spur growth.

“It’s not about the choice between austerity” and growth, Merkel told members of the regional trade and industry chambers today at Rostock’s Laage airport, in northern Germany. Austerity is “a word that I only came to know as translated from the English,” she said. “Until three years ago I never used it in Germany, we called it budget consolidation. That’s already a mouthful. Austerity somehow sounds even more aggressive.”

Merkel’s distaste for the word doesn’t signal agreement with French Finance Minister Pierre Moscovici’s weekend announcement of an “end of the dogma of austerity” as pushed by Germany. While her government has shown it’s ready to stand back as the European Union grants governments more time to meet deficit targets, she is holding to demands for economic overhauls across Europe to beat recession and the debt crisis.

That can lead to false public perceptions of Germany’s attempts to tackle the root cause of the crisis while seeking to make Europe more competitive, German Finance Minister Wolfgang Schaeuble said separately.

“The public debate -- one side for austerity and the other for growth -- is a pure misunderstanding,” Schaeuble told reporters in Berlin today after meeting with Moscovici. “We have always said we want to work together for sustainable growth. Sound finances are a necessary precondition for that.”

‘Inciting Laziness’

Moscovici too sought to avoid any German confusion over his government’s aims, saying that the European Commission “didn’t invent a new text” when granting France a two-year extension to meet deficit rules.

“This isn’t inciting laziness, or being lax,” he said. While France doesn’t favor “austerity plans that go further than necessary,” he pledged that “we won’t break with budget seriousness.”

In any case, Moscovici’s declaration of an end to austerity was a misunderstanding too, according to Schaeuble.

“Probably due to my command of the French language, I did not understand Pierre Moscovici to have said that this was a change of course,” said Schaeuble, who hails from Freiburg near the French border and who has delivered speeches in French. “I had said earlier that the commission has the leeway for such decisions and we’re supporting it.”

To contact the reporters on this story: Tony Czuczka in Rostock Laage, northern Germany via aczuczka@bloomberg.net; Rainer Buergin in Berlin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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