Brown praises 'Madame Non' on German stimulus plan

(BERLIN) - Britain and Germany sought to patch up their differences over economic policy on Thursday with Prime Minister Gordon Brown full of praise for Berlin's new economic stimulus package.

Seeking to draw a line under a row that blew up towards the end of last year, Brown said Germany's just-adopted 50 billion-euro (66-billion-dollar) rescue plan for its ailing economy was a model that others would follow.

"I believe that the lead that has been taken by Germany will be followed by others and it comes as a key time as (US) president Obama is about to take office," Brown said after talks in Berlin with German Chancellor Angela Merkel.

"People need real help for businesses and families now and this is why the stimulus that Germany is agreeing, that America is about to agree ... are important," Brown told reporters.

Merkel was dubbed "Madame Non" in some European quarters after Berlin's first stimulus package last year was attacked as being too puny to give Europe's largest economy the shot in the arm it badly needed.

Berlin's reticence to take bolder action was seen as the reason Merkel was not invited to key talks on the economy held in London between Brown, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso last month.

The perceived snub prompted Germany's Foreign Minister Frank-Walter Steinmeier to note: "I don't think it's good that the three (leaders) are meeting alone and that the chancellor is not there."

"There will certainly be some squabbles before the next European summit," Steinmeier, who challenges Merkel for the chancellorship in September elections, told German television.

London and Brussels moved to play down the spat but it was reignited a few days later when German Finance Minister Peer Steinbrueck launched an unusually strong attack on Britain's own strategy of cutting value added tax (VAT) and ramping up borrowing.

In an interview with Newsweek, which became headline news in Britain, Steinbrueck said the British government's move from financial prudence to large-scale borrowing was "breathtaking" and "crass Keynesianism."

Germany's second attempt to stave off what is feared could be its worst recession in six decades, adopted on Monday, includes 17-18 billion euros in investments in roads and schools, and nine billion euros in tax cuts for firms and individuals.

Hitting back at critics, Merkel said her "grand coalition" government had conducted a "sober analysis" of the situation and determined that the time had now come for more urgent action.

Steinmeier said that no European country was doing as much as Germany to combat the economic crisis.

Despite his talk of irresponsible borrowing, Steinbrueck said earlier this week that the new stimulus package would mean Germany's budget deficit would exceed EU limits in 2010.