Merkel downplays need for more stimulus measures

British Prime Minister Gordon Brown insisted today he was confident of agreeing a recession-fighting package at next month’s G20 – despite signs that he may struggle to get all countries to sign up to the prospect of further fiscal stimulus measures.

The Prime Minister sought to present a united front with his German counterpart Angela Merkel as she visited Downing Street ahead of the London Summit.

But, at a joint press conference following their meeting, the German Chancellor played down the need for any additional fiscal injections beyond those her government was already committed to.

Their talks came as Alistair Darling was pressing the finance ministers of all leading economies to make an “explicit commitment” that they are prepared to take further fiscal action if necessary.

Standing alongside Ms Merkel in Number 10, Mr Brown said today: “Of course we will review this as we look at what we do at the G20.

“But I think you will find that countries will be agreeing together about what we are going to do in future, both in fiscal and monetary policy and in the regulatory system.

“I believe that we are setting a path with the G20 where one by one we are reaching agreement on the big issues for the future.”

However, Ms Merkel stressed that Germany had already committed to a fiscal stimulus worth 4.2% of GDP, putting her country in the “vanguard”.

She went on to suggest any talk of further actions were premature as the current package was yet to be implemented fully.

“Nothing has actually taken effect on the ground,” she said through an interpreter.

“If we want to strengthen the effect of such packages we will simply have to implement them first.”

She also expressed confidence that the London Summit would achieve “concrete results”, but talked in more general terms about the measures that could be taken.

“What we need to focus on at this meeting is what impetus we can give the economy,” she said, referring in particular to multilateral assistance for individual countries.“