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UK, France Snub Germany at Financial Meeting

Peter Cassata | December 09, 2008

On Monday, Gordon Brown and Nicolas Sarkozy urged coordinated European fiscal stimulus measures to curb a possible recession.  The call came after a summit in London to which Angela Merkel was not invited, another example of the increasing disagreement between the two countries and Germany over an appropriate response to the financial crisis.  The FT:

Mr. Brown and Mr. Sarkozy pointed to a massive public works plan by Barack Obama, U.S. president-elect, as further evidence that they are right to argue for a large stimulus package in Europe.  But their joint participation at a “Global Europe” summit in London was seen as a snub to Angela Merkel, German chancellor, who was not invited and who has been accused of failing to act decisively to inject demand into her own economy.  Ms. Merkel’s ministers have variously suggested that the Anglo-French enthusiasm for deficit spending was akin to lemmings jumping off a cliff, or that fiscal stimulus measures elsewhere might serve to bolster Germany’s export economy.

Mr. Brown and Mr. Sarkozy both revealed that they had spoken to Ms Merkel over the weekend to reassure her that they were not ganging up on Germany just days before a European Union summit discusses the economic crisis.  José Manuel Barroso, European Commission president, also attended the London event and revealed that he too had spoken to Ms. Merkel on Monday, explaining that any EU recovery package would be fatally flawed if Germany were not on board.

However, without Germany's help, the chances of an effective rescue package seem quite diminished.

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