Europe to urge exit from stimulus schemes at G20: Merkel

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Europe will push for a swift exit from fiscal stimulus programs and a focus on budget consolidation at the G20 meeting next week, German Chancellor Angela Merkel said on Saturday.

"European participants are of the opinion that this is urgently necessary to prevent such crises from happening again in the future," Merkel said in her weekly podcast.

Leaders of the 20 biggest developed and developing economies meet on June 26-27 in Toronto, Canada.

Merkel's stance contrasted with that of US President Barack Obama, who this week said public finance problems should be addressed "in the medium term" -- a warning that clamping down budgets should not be done at the expense of recovery.

European governments have been launching austerity measures to head off a spread of the debt crisis begun in Greece.

Merkel's cabinet earlier this month unveiled Germany's biggest post-war austerity drive, with planned budget cuts and taxes amounting to 80 billion euros over the next four years.

Economic growth must be sustainable, environmentally friendly and oriented toward the future, Merkel said.

She added that the European Union would push again for a global financial transaction tax at the G20 meeting.

Germany and France have assembled support for the idea in Europe but most analysts expect next week's meeting to formally bury proposals for a single global bank tax and focus instead on advancing tough new capital rules and ways of winding up failing institutions without taxpayer help.

Canada, who hosts next week's summit, has led resistance to the idea of a common levy.

"There will certainly be controversial discussions about this but I am happy the European council reached a common stance on this for the G20 meeting," Merkel said.

A financial transaction tax is contentious because many believe such curbs in Europe would drive trading to other continents. France has supported the idea but Britain is opposed.

In a separate interview with German weekly WirtschaftsWoche, German Finance Minister Wolfgang Schaeuble said he hoped Britain would eventually support the tax, once the new government had settled down.

"I would much prefer to see a financial transaction tax introduced throughout the entire EU including Britain rather than simply in the euro zone," he told the magazine, in a pre-release of the article on Saturday.

Merkel said progress had been made on regulatory issues, but further progress needed to be made for example on rules on derivatives in the EU.

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