GERMAN ECONOMY AND THE EURO-ZONE

Motion Text

That this House expresses its concern about the continuing low economic growth and high unemployment in Germany; recognises that the new coalition government faces serious difficulties in reviving economic activity in Germany and the importance of a strong German economy for the whole of the European Union; considers that the recent measures proposed by the new government for dealing with Germany's economic difficulties are essentially deflationary, involving as they do a net tightening of fiscal policy, so that they will have the opposite effect to that required; believes that what is really needed is a significant loosening of monetary policy by means of a cut in interest rates to stimulate domestic consumer demand in Germany; is therefore alarmed that the European Central Bank is contemplating an increase in interest rates which will make Germany's problems worse; and further believes that the German economy will not recover while gripped in the deflationary vice of the eurozone.