Germany: Europe’s fiscal deal ‘still stands’

Germany: Europe's fiscal deal 'still stands'
Dirk Vorderstraße

German Foreign Minister Guido Westerwelle on Friday warned that new elections did not invalidate European Union's deal on tighter fiscal policy.

“The fiscal pact is decided. It stands,” he said. “Agreements between states do not become invalid with new elections,” he told lawmakers in the Bundestag lower house of parliament.

Westerwelle’s comments came after calls by France’s president-elect François Hollande to add growth-stimulating measures to the accord.

Hollande is facing resistance to his plan to reopen talks on the EU’s hard-won fiscal austerity pact in order to refocus the EU’s economic policy on growth.

He will travel to Berlin Tuesday, just hours after his inauguration, to meet Chancellor Angela Merkel who has championed a policy of austerity to beat the eurozone debt crisis.

Since Hollande’s election victory last Sunday, Merkel who faces a major regional election in Germany herself Sunday, has talked tough on the need for both debt-reduction and growth.

“Growth cannot be bought with debt. Competitiveness is the key to more growth. And competitiveness is achieved through structural reforms,” Westerwelle said.

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