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UPDATE 1-Germany criticises British economic rescue plan

Published 12/10/2008, 06:09 PM
Updated 12/10/2008, 06:15 PM

(Adds quotes, background)

LONDON, Dec 10 (Reuters) - German Finance Minister Peer Steinbrueck has attacked Britain's plans to tackle the global financial crisis, calling them "breathtaking" measures that will saddle a generation with debt.

In an interview with Newsweek magazine, he said governments around the world risked repeating the mistakes from the past in the rush to be seen to be taking action.

"The same people who would never touch deficit spending are now tossing around billions," he was quoted as saying in the interview, published on the Newsweek website on Wednesday.

"The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking."

He urged governments to pause before pledging to spend billions of dollars on plans to help their economies emerge from the worst economic turmoil in 70 years.

"The speed at which proposals are put together under pressure that don't even pass an economic test is breathtaking and depressing," he said.

He singled out British Prime Minister Gordon Brown's government and questioned the value of its recent decision to cut the sales tax by 2.5 percentage points, saying there was no evidence it would stimulate consumer demand.

"All this will do is raise Britain's debt to a level that will take a whole generation to work off," he said.

The criticism is likely to be seized upon by Britain's opposition Conservatives who say Brown's rescue plan involves too much public borrowing. (Reporting by Peter Griffiths; editing by Elizabeth Piper)

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