German Officials Bristle at U.S. Economic Criticism

Germany on Friday lashed back at U.S. criticism of its economic policies, raising the odds against the world’s largest economies agreeing on a common path.

The dispute blossomed as officials from the Group of Seven industrial nations prepared to confer Sunday, in conjunction with the spring meetings of the International Monetary Fund and the World Bank.

U.S. Treasury Undersecretary David Mulford stirred the pot Thursday by saying that German economic policies were hurting all of Europe.

German responses flowed back Friday, the sharpest coming from Chancellor Helmut Kohl’s top economic adviser, Horst Koehler, who said his country was not responsible for all of Europe.

Telling Mulford, in effect, to mind his own business, Koehler said in Bonn: “The principle of G-7 cooperation rests on the principle that every country should keep its own house in order. David Mulford’s comments are to be rejected in form and content.”

Koehler, state secretary in the German Finance Ministry, added that “it was not acceptable that the deliberation of the G-7 ministers should be burdened by one-sided and partly false public comments by a senior official.”

He said the “important thing is that Germany is financing its public deficits from its own savings.”

The Bush Administration, caught up in election year politics, has been anxious to get the U.S. economy rolling again. It wants industrial trading partners such as Germany to pitch in and help by buying more American products.