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11th-hour Euro deal fails to heal rift with Berlin
Paul Waugh, Deputy Political Editor12 Dec 2008
TENSIONS between Britain and Germany simmered on today despite a compromise deal over EU plans to fight the recession and tackle climate change.
The Brussels summit sealed an 11th-hour agreement on a £178 billion stimulus package after German chancellor Angela Merkel finally agreed to the Europe-wide plan.
After days of diplomatic clashes between Berlin and London over the merits of using borrowing to kickstart the economy, British sources were delighted that Mrs Merkel had signed up to the recovery package.
But Germany defeated Britain on the environment as EU leaders caved in to its demands to water down moves to slash greenhouse gases.
Mrs Merkel angered environmentalists by protecting Germany's heavy industries from a new target to cut carbon dioxide levels by 20 per cent by 2020.
Relations between Gordon Brown and Mrs Merkel were badly bruised after her finance minister Peer Steinbrück attacked Britain's "crass Keynesianism" and mocked the impact of the VAT cut.
Foreign Secretary David Miliband seized on Mrs Merkel's agreement to the EU deal as proof that Mr Brown was right to lead the way on the plan.
Mr Miliband hit back at German criticism today, pointing out that Mr Steinbrück was planning his own fiscal boost next year and the year after to the tune of one per cent of Berlin's gross domestic product.
The row intensified last night when Steffen Kampeter, an economic spokesman for Mrs Merkel's CDU party, said Britain's moves to raise public debt to deal represented a "complete failure of Labour policy".
He said: "After years of lecturing us on how we need to share in the gains of uncontrolled financial markets, the Labour politicians can't now expect us to share in its losses."
Mr Miliband hit back at Mr Kampeter, pointing out that he had links to the Tory party.
The "fiscal stimulus" plan agreed today is equivalent to 1.5 per cent of the EU's projected GDP. It seeks to boost employment and growth, and would involve everything from tax cuts to investment strategies, while taking account of differences between the economies of each member state.
British sources said they were very unhappy with the watering down of the climate change deal because too much had been given away - particularly to Germany's heavy industry.
Mr Miliband admitted there were "serious differences" over the support needed for some states.
Under the deal, East European nations will be handed extra carbon credits free of charge, and industries in Western Europe will get huge sweeteners which reduce the cost of cutting emissions.
Reader views (9)
Tensions between England and Germany? Where have I heard that before...
- Nobby Clark, Perth, Scotland
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Er,...Um,.......1914 & 1939, ring a bell Nobby?
GERONIMO
- Geronimo, LONDON MIDDLESEX, 14/12/2008 22:08
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Bankrupt Brown started small by burgling UK pensions. Ony £150 billion of old pensioners savings, they had put away for old age, from earned income already.
Brown wants to control who gets money. He spent the old peoples savings like water to build State dependency into every marginal seat, so people are effectively degraded into depending on Labour handouts.
Not enough money for Brown, now he is borrowing ONE TRILLION POUNDS. That is not quite right, he is making us borrow that money. The interest alone of £10 BILLION
each year. That exceeds total capital borrowing before.
ANNUAL INTEREST TAXPAYERS PAY EXCEEDS ALL LOANS BEFORE.
The joke was Brown was Stalin, turned into Mr Bean, now he is Bankrupt Brown. No joke about the reality he is still Stalin and Bean and also Bankrupting the UK to buy votes.
The fact of excessive borrowing, done by Brown on State spending, and encouraged in the private sector by Brown on the housing boom as he manipulated low interest rates to follow his low inflation measure, got the UK into trouble, and now to solve it Brown promises A return to 2007 lending levels! He has completely lost his marbles, or thinks the UK are total idiots. Probably the latter, after his 10 pence tax farce, he hailed as his triumph, only for a year later everyone worked out it was a complete cock up.
- Jack, Brum, 13/12/2008 11:59
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As with a fiscal stimulus which relies on increased borrowing and was stripped of further credibility due to a pointless and wholly unhelpful £12.5 billion Vat giveaway (the money might just as well have been burnt), the position of Britain on greenhouse gasses is equally out of touch.
I do not have the figures to prove it but, my guess is the EU is already delivering a massive reduction in greenhouse gasses. We did not need the pain and expense of "greenhouse taxes" to achieve this reduction, it is a natural consequence of the austere times we are now in, times that will continue for the foreseeable future.
People are cutting back to save on every area of working and domestic life; car journeys down, utility consumption down (water, electricity, gas) at home and in the work, Government and Local Council premises excepted.
Why do Governments think the floor has fallen out of the price of a barrel of oil? Because the oil producers like us!!!
This shows how so behind politicians are, they set their emissions targets to deal with output at the top of the economic cycle and deploy them at the bottom of the cycle. Like the monolithic oil tanker they plough straight on long after they should have turned or stopped. There is nothing as intransigent and incapable of adjustment as a pre-planned Government policy.
- Robert, Dumbarton, 12/12/2008 18:30
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But Bean Brown said "we are all united"?!
- Jacqueline, Hampstead, London, 12/12/2008 16:37
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No Nobby, not England and Germany, Scotland and Germany. Brown (or should that be Borown?)Scotland against Germany and Cameron (England). For once we are on the same side!
- Stephen Rothbart, Prague, Czech Republic, 12/12/2008 16:00
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Brown better get used to Germany getting its way. Once the threats and brow-beating make the Irish say YES and the U.K. and the other 26 states have become de jure E.U. provinces (expected 1 January 2010), Brown and PMs that follow will be continuously stepped on. Germany will run the show in the new country.
- Phil Jones, London UK, 12/12/2008 15:34
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So he's got links to the Tory Party - not all bad news then. Brown's got links to the communist party.
- Frederick, London UK, 12/12/2008 13:51
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So Miliband is saying that because Kampeter 'has links to the Tory party', he's a congenital liar?
As always, attack the man, not the ball.
- Chuck Unsworth, London, 12/12/2008 12:37
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Tensions between England and Germany? Where have I heard that before...
- Nobby Clark, Perth, Scotland, 12/12/2008 12:16
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