BERLIN - Germany's finance minister has taken a public swipe at Britain's economic stimulus package, calling it a "crass" plan that would encumber the next generation with more debt than ever before.
In an interview with Newsweek magazine, Peer Steinbrueck cast doubt on the effectiveness of Britain's 20 billion pound ($29.6 billion) package, whose most prominent point is a decision to cut value-added tax from 17.5 percent to 15 percent. The German government has resisted the idea of making similar cuts.
"We have no idea how much of that stores will pass on to customers. Are you really going to buy a DVD player because it now costs 39.10 pounds instead of 39.90?" Steinbrueck was quoted as saying.
"All this will do is raise Britain's debt to a level that will take a whole generation to work off. The same people who would never touch deficit spending are now tossing around billions," Steinbrueck told the magazine.
"The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking," he said, referring to an economic theory which supports the use of public money to stimulate the economy.
In Germany, a stimulus package drawn up by Chancellor Angela Merkel's government contains measures such as tax breaks on new cars and credit assistance for companies. Officials have defended the package, which is expected to cost the government euro23 billion ($29.7 billion) and trigger investments of up to euro50 billion, against opposition criticism that it is too timid and have rejected calls for quick tax cuts.
Steinbrueck's spokesman issued a statement Thursday defending the comments by the minister, who is known for a sometimes combative style.
"It is not about criticizing our British friends," Torsten Albig said.
"The Finance Minister simply made very clear ... why a limited drop in value-added tax is not an appropriate instrument for Germany or for the fight against the global recession."
In an interview with Newsweek magazine, Peer Steinbrueck cast doubt on the effectiveness of Britain's 20 billion pound ($29.6 billion) package, whose most prominent point is a decision to cut value-added tax from 17.5 percent to 15 percent. The German government has resisted the idea of making similar cuts.
"We have no idea how much of that stores will pass on to customers. Are you really going to buy a DVD player because it now costs 39.10 pounds instead of 39.90?" Steinbrueck was quoted as saying.
"All this will do is raise Britain's debt to a level that will take a whole generation to work off. The same people who would never touch deficit spending are now tossing around billions," Steinbrueck told the magazine.
"The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking," he said, referring to an economic theory which supports the use of public money to stimulate the economy.
In Germany, a stimulus package drawn up by Chancellor Angela Merkel's government contains measures such as tax breaks on new cars and credit assistance for companies. Officials have defended the package, which is expected to cost the government euro23 billion ($29.7 billion) and trigger investments of up to euro50 billion, against opposition criticism that it is too timid and have rejected calls for quick tax cuts.
Steinbrueck's spokesman issued a statement Thursday defending the comments by the minister, who is known for a sometimes combative style.
"It is not about criticizing our British friends," Torsten Albig said.
"The Finance Minister simply made very clear ... why a limited drop in value-added tax is not an appropriate instrument for Germany or for the fight against the global recession."
