German Stimulus

German daily Deutsche Welle reports on German plans to inject close to $68 billion in government spending and infrastructure investment in the coming year. 

Government officials are meeting tomorrow to finalize the details, but it looks as if the plans will breach EU caps on government spending that seek to reduce borrowing.  According to Deutsche Welle:

"The Maastricht rules agreed when the euro was introduced require euro nations to limit net borrowing to no more than three percent of GDP.  The strict rules are meant to underpin the common currency and keep it stable."

German spending plans will equal about 3.5 percent of the nation's GDP this year and near 4.5 percent next year. 

The Future of Capitalism

French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel welcomed financial experts in Paris to discuss "the future of capitalism," seeking to create a new system of international financial governance and institutions.  

Merkel suggested a "powerful new economic council at the UN," reports France24.com.  Both urged the US not to stand in the way of tighter financial regulation, which they blame the current crisis on -- a good sign for those of us eager to get past the Reagan-Thatcher era.  

The goal, said European leaders involved in the two-day event dubbed "New World, New Capitalism," was not to end capitalism or finance as we know it, but to foster the "return of the state" as a regulator.  

Tony Blair, chairing the event, told attendees -- Amartya Sen, Pascal Lamy and Joseph Stiglitz, among other notables -- that the current system of seven powerful economies making global financial decisions is an "absurdity" in these times, calling for the inclusion of a wide array of emerging economies and interested parties.  

"We have mid-20th century international institutions governing a 21st century world," he said, calling for the reformation of the IMF and the World Bank.