德國

Merkel austerity comments highlights gulf in eurozone

Angela Merkel underlined the gulf at the heart of the eurozone when she waded into interest rate policy arguing that, taken in isolation, Germany would need higher rates, in contrast to southern states which are crying out for looser monetary policy.

The German chancellor’s highly unusual intervention a week before many economists expect the independent European Central Bank to cut its main interest rate, highlights the division between the economies of the prosperous north and austerity-hit south.

As the number of unemployed in Spain broke the 6m barrier and France set a record with 3.2m out of work, according to new data, a long simmering growth-versus-austerity debate has boiled over with increasing calls from outside Germany to rethink crisis-fighting measures.

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