France & Germany Reject US calls For Cash Stimulus

Its seems as though the end result of all of this, the plan, is to keep the Euro strong while making the independent nations’ (like US and Britain) currencies weak in order to build a better case for a global currency/global economic order:

EU to urge IMF topup but resist extra stimulus callReuters, March 18,2009

BRUSSELS, March 19 (Reuters) – European Union leaders will agree on Thursday to push for the International Monetary Fund to have more firepower to fight the global slowdown, but resist calls to inject new cash into their own economies.

The two-day Brussels summit is aimed at fine-tuning the European stance for a G20 meeting two weeks later where the world will expect major powers to get to grips with an economic crisis that has strained rich and poor states alike.

Anxious to maintain the budgetary rigour underpinning the euro currency zone, continental European capitals have shrugged off U.S. calls for more fiscal stimulus and put faith in their generous welfare states to ride out the worst of the storm.

Interesting that Germany and France are reluctant to print large amounts of money as part of “stimulus” packages. Notice that the Euro is rising significantly against the GBP and the Dollar right now. It seems that at least a couple countries remember the history of Germany’s depression-era Weimar republic and the hyperinflationary consequences that followed love affair with the currency printing press:

U.S.-Europe Split On Economic Stimulus Erupts Ahead Of G20
Radio Free Europe, Radio Liberty, March 11, 2009

At the start of this week, Larry Summers, the top economic adviser to U.S. President Barack Obama, asked Europe to consider another round of stimulus packages to spark battle the global recession.

But on March 10, EU finance ministers meeting in Brussels rebuffed the idea. Speaking for the group, German Finance Minister Peer Steinbrueck said there was “significant bewilderment” over their U.S. colleague’s position.[Amen brother]

But “bewilderment” may be a good word for describing how both sides of the Atlantic are coming to regard each other’s approach to tackling the recession.

As the world looks to the G20 meeting of developing and industrialized states in London on April 2 for a coordinated strategy for reviving the global economy, in the run-up to the summit it’s becoming clear that the United States and Europe have very different philosophies about how to get out of the current crisis.

The United States has budgeted an $800 billion package, which is equivalent to some 5.9 percent of the country’s gross domestic product (GDP). That includes tax cuts to put more money in consumers’ pockets, funding for public works programs, and more benefits for unemployed people.

By comparison, Germany has budgeted a 50 billion-euro stimulus package, equivalent to some 1.3 percent of its GDP. France has done the same. And Britain has budgeted a package that equals about 1 percent of its GDP [more than that now, see Mar 11th article”*****Britain Monetizes Its National Debt*****“). That is largely to bolster social-welfare programs that normally help people in times of need.