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Economy

Germans wreck 'global new deal'

2009-03-29

GORDON BROWN'S carefully laid plans for a G20 deal on worldwide tax cuts have been scuppered by an eve-of-summit ambush by European leaders.

Scuppered!

Angela Merkel, the German chancellor, last night led the assault on the prime minister's "global new deal" for a $2 trillion-plus fiscal stimulus to end the recession. "I will not let anyone tell me that we must spend more money," she said.

The Spanish finance minister, Pedro Solbes, also dismissed new cash being pledged at Thursday's London summit. "In these conditions I and the rest of my colleagues from the eurozone believe there is no room for new fiscal stimulus plans," he said.

Nicolas Sarkozy, the French president, has insisted that "radical reform" of capitalism is more important than tax cutting.

The attacks on Brown's ambitions for the G20 to inject more money into the world economy come at the end of a week where the prime minister has travelled to three continents to build support for his proposals.

The likely deadlock at this week's meeting will kill any remaining hope that Alistair Darling's April 22 budget will offer significant tax cuts. The assault by European Union leaders also represents a defeat for President Barack Obama, who is desperate for other big economies to copy his $800 billion stimulus plan.

The leaders of Europe are not answerable to the Obamatons.

"There will be a very long communiqué, but there won't be much in it," said a Washington economist ~~with a largely straight face~~.

Posted by:Fred

#8 Let's try Communism for a change. Maybe it will work this time.

Posted by: SteveS 2009-03-29 13:28

#7 DuckTales on Stimulus

Posted by: 3dc 2009-03-29 12:34

#6 Read the other article Tipper found from the Atlantic. Tax cuts would certainly be useful, but the international order has indeed been living beyond its means. Whether that means you have to nationalize the banks to clean them out (and then re-privatize them), whether you have to change the actors in charge, etc., one root problem here is the lack of confidence. Nothing Bambi, Brown, Angie or Sark do will matter until that gets fixed.

Posted by: Steve White 2009-03-29 11:38

#5 Nicolas Sarkozy, the French president, has insisted that "radical reform" of capitalism is more important than tax cutting.

If found to be accurate, I'd have to give Sarko a failing grade on THAT statement.

Posted by: Besoeker 2009-03-29 08:38

#4 Brown's plan

Lets look at the record, phil_b

Posted by: g(r)omgoru 2009-03-29 04:08

#3 Barbara, despite it's source, it's actually a good idea.

The main problem with the current stimulus packages is they direct money to the usual spongers, whiners and special interest groups, which makes them grow in size and means they will demand even more money in the future. The hardest thing for a government to do is to stop giving money to a special interest group.

Brown's plan cuts taxes, which means the stimulus comes from people who earned the money and is (much) more likely to result in longer term investments.

And when people talk about "radical reform" of capitalism, you should be seriously worried.

Years before this crisis erupted, it was common knowledge in the investment world (I was aware of this) that the cost of 'insuring' certain extreme risks was heavily discounted because it was assumed the government would bail out the party in trouble. And lo and behold thats' what happened.

Posted by: phil_b 2009-03-29 01:54

#2 Back to the glowball carbon cap and trade get rich quick scheme. That's where the 'real' phoney money is anyway.

Posted by: Muggsy Glink 2009-03-29 00:50

#1 I don't give a rat's ass who wrecks it, as long as it is well and truly DEAD.

Scratch a "global" anything, find a tranzi.

Posted by: Barbara Skolaut 2009-03-29 00:15

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