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Merkel’s comments underscore a focus on her government’s record of pressing for deficit cuts as a core campaign theme for the state elections next month, even as investors and economists call for Germany to step up its response to the debt crisis now marauding Spain. The ballots will offer a snapshot of public support for her crisis handling, as well as a foretaste of voter sentiment before the next federal election due in 2013.
Merkel’s message was reinforced by Finance Minister, Wolfgang Schauble, who said separately that any amount of bailout funds and financial firewalls “won’t solve the problem” without a commitment to reduce debt and raise competitiveness, the root causes of the crisis.
Germany faces criticism for its anti-crisis policy of spending cuts from economists such as Nobel laureate, Paul Krugman. Spain needs a new remedy to its ills since its story “bears no resemblance to the morality tales so popular among European officials, especially in Germany".