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Merkel still cautious despite rosy outlook on economy

Wednesday, April 09, 2014 - 02:05

April 9 - German imports climb to their highest level since reunification while exports fall. Hayley Platt asks what the increase in domestic demand in Europe's largest economy means for the rest of the euro zone.

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Strengthening the economy for the future. With Germany well on the road to recovery, that's Chancellor Angela Merkel's goal. In her budget speech she said Europe's biggest economy hopes to balance the books next year. SOUNDBITE: GERMAN CHANCELLOR, ANGELA MERKEL, SAYING (German): "In 2014, we will have a structurally balanced budget and in 2015, we have the possibility not to make any new debt. Dear colleagues, those are not just figures. This is nothing more and nothing less than fulfilling a promise for future generations to one day get by without future debts and to make do with the taxes that are coming in." While the outlook is more positive, Merkel warned the euro crisis is not completely over. And ongoing troubles in Ukraine, as well as turbulence in emerging markets, has created more uncertainty. Berlin's recently enjoyed a stream of positive data. Imports climbed to their highest level since reunification in February, while exports fell. It's a sign that domestic demand is gathering pace, as consumers and companies spend more. William De Vijlder is from BNP Paribas. SOUNDBITE: William De Vijlder, Chief Investment Officer, BNP, saying (English): "Let's not forget that Germany is also going to benefit from the improved economic developments elsewhere in Europe and specifically then in the periphery, so all in all you have a kind of positive interaction occuring with the rest of Europe also doing well, beneficial for Germany, which then can be beneficial for the rest of Europe as well." Germany doesn't believe improvement in the euro zone is a reason to relax economic rules. That comment may be directed at Finance Minister Schaeuble's French counterpart Sapin - who's hinted France may ask for more time to meet its deficit targets. Other countries have also had enough of economic reforms. Greek workers went on strike again - demonstrating against austerity, which they say has ruined people's livelihoods. It's not clear if Chancellor Merkel is listening to their complaints, ahead of her visit to Athens on Friday. She's due to show her support for the government's reforms.

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Merkel still cautious despite rosy outlook on economy

Wednesday, April 09, 2014 - 02:05