FRANKFURT (Reuters) - A top European Central Bank policymaker and a senior German government official have made a joint call for Germany to promote investment and cut taxes on workers’ pay to support a recovery in the euro zone economy.
Germany could “use its available room for maneuver to promote investments and reduce the tax burden of workers,” ECB Executive Board member Benoit Coeure and deputy Labour Minister Joerg Asmussen wrote in a commentary piece for publication in Friday’s edition of the Berliner Zeitung newspaper.
Asmussen worked with Coeure on the ECB Executive Board until the end of last year when he quit to take up his role at the Labour Ministry in Berlin. The two men supported tax cuts in Germany to help fully overcome the euro zone crisis.
“That would not threaten the sustainability of state finances and would make the country fit for the coming challenges,” they wrote.
ECB President Mario Draghi last month said it would be “helpful” in the euro zone “if fiscal policy could play a greater role alongside monetary policy, and I believe there is scope for this.”
Draghi’s remark was seen as a thinly veiled call for Germany to loosen its purse strings and increase investment to promote growth in the euro zone.
Writing by Paul Carrel; Editing by Hugh Lawson