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Germany prepares plan to stave off future debt crises

GERMANY is drawing up plans to boost the euro and avert future debt crises, a finance ministry spokesman said yesterday, declining to confirm reports Berlin wants a German-style debt brake across the Eurozone.

Berlin is said to be pushing the idea of tougher fiscal rules based on a German law to shield the Eurozone from excessive debt.

Finance minister Wolfgang Schaeuble was preparing for a working group of Eurozone countries that meets on Friday to discuss ways to help the bloc.

Germany passed a debt brake law in 2009 when it pumped billions of euros into the economy through stimulus measures. The law sets a deficit limit of 0.35 per cent of GDP by 2016 and says it must remain at that level. The brake is designed to steadily reduce the debt-to-GDP ratio in Europe’s biggest economy.