Politics stymie German crisis response - minister

By Matt Falloon

LONDON (Reuters) - Wrangling in Germany's coalition government is hampering its response to the economic crisis, a British government minister said on Thursday, after the German finance minister criticised Britain's economic stimulus plan.

Peer Steinbrueck, a Social Democrat in Germany's conservative-led coalition government, said Britain was adopting untested policies that could saddle it with debt that would take a generation to clear.

The spat fuelled speculation of a rift between Germany and other major European nations over how to deal with the downturn. Europe's biggest economy has come under pressure for apparently dragging its heels during the crisis.

"They are arguing in Germany about the right way to go," schools minister Ed Balls told Sky TV. "Once the politics in Germany is resolved they will be acting with us too."

Steinbrueck's comments came ahead of a meeting between European leaders in Brussels to discuss ways to respond to the economic downturn. The German finance ministry said his words had been misinterpreted.

"There is no question of criticising our British friends. Nothing is further from our minds," it said in a statement.

With German elections due next year, Steinbrueck has said there will be no additional economic package before Easter. Conservative German leader Angela Merkel says she will review the situation in the new year.

"We will find Germany joining the consensus of countries around the world who know that action now for our economies is the right thing to do," added Balls, a close ally of Prime Minister Gordon Brown.