News Summary: German austerity policies challenged

Challenger to Germany's Merkel criticizes austerity policies, calls for European growth plan

Associated Press

ANOTHER VIEW: Chancellor Angela Merkel's challenger in the upcoming election said that her government's insistence on budget austerity across Europe is creating economic stagnation and called for a new Marshall Plan to revive the continent.

THE RECORD: Merkel's government has insisted that indebted countries make dramatic spending cuts and reform their economies. With Europe stuck in a recession and unemployment at record highs, critics have said that these policies have intensified the economic downturn.

THROWING THE GAUNTLET: In his first major foreign policy speech ahead of the September election, Peer Steinbrueck called for a new Marshall Plan to avoid a "diabolical spiral" toward further joblessness and economic despair. He said the program could be funded in part by new taxes on financial transactions and would invest heavily in job training and education.

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