Germany insists it's doling out stimulus
German Chancellor Angela Merkel points during a press conference following a meeting of European Union leaders at the Chancellery on February 22, 2009 in Berlin, Germany.
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Kai Ryssdal: The White House is trying to cool a growing spat with Europe. Treasury Secretary Timothy Geithner leaves tonight for a big meeting outside London this weekend. Finance ministers from the world's 20 biggest economies are trying to lay the groundwork for when their bosses get together next month. There is still though some disagreement over what exactly economic stimulus is. From the Marketplace European Desk in London, Stephen Beard reports.
STEPHEN BEARD: Germany insists that it's not been tight-fisted in doling out stimulus money. That perception, the Germans say, ignores the fact that they have a far more generous welfare system than America. As Germany slides deeper into recession, its government automatically pays out more in unemployment benefits than the U.S. These so-called stabilizers provide an automatic boost for the German economy. Stephan Richter is with the online magazine "The Globalist." He says the IMF looked at the figures and the Germans are right.
STEPHAN RICHTER: They said there's an insignificant difference in the stimulus package between Germany and the U.S. for 2009. And in fact in 2010, because of these automatic stabilizers, the German package is going to be a little larger than the U.S. package.
German analysts also point out that the worst of the economic crisis has yet to hit Europe. And the problems ahead could be huge. Bankruptcy is looming for some of the former communist countries in the East like Hungary. Germany is right to save for that rainy day, says commentator Heinz Schulte.
HEINZ SCHULTE: At the end of the day somebody has to underwrite the debts of the new members of the European Union and that would be the engine of European economic progress which is Germany.
He says the Germans may also have to bailout the Eurozone as countries like Ireland and Greece threaten to default on their debts. Pretty soon, he says, Germany will be the most stimulating place on the planet.
In London, this is Stephen Beard for Marketplace.