The German cabinet has approved plans to boost spending by 15 billion euros over the coming four years. But as David Pollard reports, the occasion was over-shadowed by violent clashes in Frankfurt’s financial district as a new European Central Bank headquarters was officially opened.
It wasn't the best start to an auspicious day at the European Central Bank. 90 people were injured in clashes between anti-capitalists and police ahead of the official inauguration of a new headquarters in Frankfurt. The building has cost a billion euros - too much say some. But in his opening address ECB bank boss Mario Draghi said the protestors were missing the point. (SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "The euro area is not a political union yet of the sort where some countries permanently pay for others, like it happens within one single country where regions pay for other regions. It has always been understood that countries have to be able to stand on their own two feet, that each is responsible for its own policies." The protests also stole headlines from Germany's budget statement. But that was perhaps less controversial. The German cabinet approved plans to spend 15 billion euros over the next four years. Extra cash will go to infrastructure, foreign aid and defence - all areas many others in Europe are cutting. The difference - Germany balanced its budget last year, one year early. The contrast with Greece is stark. But Germany denied there was any conflict between the two countries. Finance Minister Wolfgang Schaeuble. (SOUNDBITE) (German) GERMAN FINANCE MINISTER, WOLFGANG SCHAEUBLE, SAYING: "Debt restructuring is not the issue but rather how Greece can get back on track to become competitive and regain access to financial markets." Economic data from Germany in recent months has been encouraging. It's also benefitting from the ECB's latest bond-buying programme. But not as much as others, says Christian Schulz of Berenberg Bank. (SOUNDBITE) CHRISTIAN SCHULZ, SENIOR EUROPEAN ECONOMIST, BERENBERG BANK, SAYING: ''German borrowing costs were very low already to start with, so the extra benefit is relatively small. Countries with higher borrowing costs to start with, such as Portugal, Spain, Italy, actually benefit more, at least from that channel of QE.'' The government had already allocated 10 billion euros to public investments prior to the budget But opposition politicians still say it's not enough, complaining infrastructure has been neglected for years. Either way many watching from the outside - particularly those in Greece - may see this as more evidence Germany can afford to be generous.