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Opinion

Brittan takes on Germany

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Is Germany really ready for full-blooded capitalism? That was the theme of the first Euromoney German Capital Markets Forum, which saw a lively debate on how Germany will finance itself in the future.

Finance minister Hans Eichel opened the two-day forum, held in Berlin at the end of April. Having cut corporate income tax from 25% to 19%, Eichel stressed that Germany now had to extend its tax base to avoid taking on too much new debt.

Former European Commissioner Lord Brittan, now vice chairman of UBS Investment Bank, also spoke at the conference. In a panel discussion with Peter Bofinger, one of the German government's economic advisers, Lord Brittan said Germany should not use an expansionary fiscal policy to soften the impact of economic restructuring. Bofinger replied that Brittan's belief in monetarism was "theology, not economics."

Brittan urged Germany not to rely on protectionism and subsidies to compete with emerging economies. As he left the podium, Brittan, who was once Minister for Trade and Industry in the most robustly pro-market administration Europe has yet seen, whispered to a UBS colleague: "I hope I wasn't too strident."

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