G20 leaders shoot down Brown's 'new deal'

March 29, 2009 at 9:49 AM
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LONDON, March 29 (UPI) -- Britain's European allies say they can't support Prime Minister Gordon Brown's $2 trillion-plus "global new deal" fiscal stimulus proposal.

Speaking Saturday during the run-up to this week's Group of 20 economic summit in London, German Chancellor Angela Merkel led the assault on Brown's proposal.

"I will not let anyone tell me that we must spend more money," she was quoted as saying in The Sunday Times of London.

Spanish Finance Minister Pedro Solbes also shot down the idea of government spending infusions, saying, "In these conditions, I and the rest of my colleagues from the eurozone believe there is no room for new fiscal stimulus plans."

Brown's aim to cut taxes to stimulate the world economy has also drawn opposition from French President Nicolas Sarkozy, who insisted "radical reform" of capitalism takes precedence over cutting taxes -- throwing fresh doubt on whether Chancellor of the Exchequer Alistair Darling's new British budget will contain any significant tax cuts, The Sunday Times said.

The European stance is also a defeat for U.S. President Barack Obama, who wanted to convince Merkel and others to emulate his $800 billion U.S. spending program, observers said.

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