Germany and France are cooperating closely to resolve the economic crisis at European level. They aim to ensure a joint and coordinated approach on the part of the European Union. The crisis offers an opportunity to forge ahead with new and innovative ideas, underscored Chancellor Angela Merkel, speaking in Paris.
"If we, in Europe, act now, we must renew our continent,” she demanded. We must see the economic crisis as an opportunity.
Not every measure to revitalise the European economy has to cost money, the Chancellor underlined. The rules of competition for the broadband network, for instance, can be made more flexible.
Angela Merkel and Nicolas Sarkozy agree that VAT should not be cut
The Chancellor did, however, speak out against any general reduction in value added tax (VAT). This is not the right response for either Germany or for France, she said. Essentially, every country must decide on precisely targeted assistance. With its investment package Germany has already done so. As one example, Angela Merkel pointed to the cut in vehicle tax and the new regulation that makes tradespersons’ invoices tax-deductible.
Now, she said, we must give these measures time to have an impact. Nobody can predict how the crisis will develop. New economic forecasts are being published on an almost hourly basis. At the beginning of January the coalition will get together and discuss the results achieved to date, the Chancellor announced.
During the financial crisis France and Germany are working very closely, both Angela Merkel and the French President emphasised. The two countries regularly exchange information and views about the results of the measures already taken.
The economy and climate protection – ‘and’ not ‘or’
Angela Merkel criticised the current lending practice of banks which she said was "still not satisfactory”. "We are still going to need all our powers of persuasion to get the banks to do what they are expected to do, i.e. lend money,” she stated.
The European Council meeting due to be held soon will be discussing how the energy- and climate-related decisions of 2007 can be put into practice, in addition to economic measures. By 2020 the EU aims to cut its emissions of greenhouse gases by 20 percent, and by as much as 30 percent if other international partners make similar commitments. The Chancellor was optimistic that effective decisions can be made in this regard. There are good chances of reaching agreement, she declared. Once again she underscored the fact that the imperatives of climate protection must not be played off against the imperative of saving jobs.