Brown and Merkel in talks to end recession

Thursday, 15 January 2009 12:00 AM

By Laura Miller

Gordon Brown will meet the German Chancellor today to discuss the need for co-operation in tackling the economic crisis.

The PM, who has admitted that without multi-lateral action the global downturn will extend even further into the future, is in Germany to help finalise a worldwide response before a meeting of the G20 in London in April.

Chancellor Merkel's coalition government announced a ¿50 billion stimulus package for Germany earlier this week, which included infrastructure investment and tax cuts, a move the chancellor had been reluctant to make on the grounds that Gordon Brown's VAT style cuts do not encourage consumer spending.

Growth in Germany, Europe's biggest economy, was more than halved last year to 1.3 per cent as the slowdown hit exports and the country slid into recession.

Mr Brown's visit follows a glitch in Anglo-German relations late last year when German finance minister Peer Steinbruck criticised Mr Brown's own rescue package as "crass Keynesianism".

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• economy
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• economy and finance
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• world economy