Sen. Jack Reed (D-R.I.) lamented that German Chancellor Angela Merkel could be "eroding" on her anti-stimulus views, saying the German leader wasn't ready to "clear a huge fiscal stimulus."
"The situation is Europe is they adopted a strategy of austerity and it's not working," Reed said on CNN's Starting Point with Soledad O'Brien Wednesday morning. "She does recognize there has to be growth as well as responsible fiscal controls. I think the chancellor is trying to understand that there has to be growth in Europe, worldwide growth. ... And I don't think she's quite ready as she's indicated in statements to clear a huge fiscal stimulus. But her reluctance, I think, is eroding. It has to. The austerity is not working in Europe."
Wrapping up their annual Group of 20 meeting, world leaders looked to settle economic qualms, debating stimulus versus austerity. Conservative leaders of the United Kingdom, South Korea and Germany voiced strong support for austerity and warned that budget cuts were an important part of restoring fiscal order, according to the AP.
During a Tuesday press conference, Merkel noted President Obama was also in agreement about the ineffectiveness of a stimulus.
"The American president said and we on the European side said, that doesn't work," she said. "The debts are too high for that."
But Reed sees the president's agreement as up for debate, saying the only way Europe can work out its economic woes is if they reach a balance between short- and long-term growth.
"I think that it's a matter of interpretation, perhaps," he said. "I think the president has made it very clear, unless there's the growth, short-term growth along with long-term imposition of fiscal discipline that the Europe is not going to be able to sort of work itself out of the problem.
"And that's not a feeling shared uniquely by President Obama," he continued. "The irony here, and the policies the Europeans have pursued — austerity principally — have not only caused significant unemployment but also widened the deficit and made their financial situations more precarious and weakened their banking institutions. It hasn't led to success."
