Merkel signals G20 clash with Obama on finance

German Chancellor Angela Merkel said on Saturday spending cutbacks are needed following the spate of throwing money at the global economic crisis, in a direct counter to US President Barack Obama.

Referring to the G20 summit in Canada next weekend, Merkel said in a videotaped message that «we are going to discuss when to quit the phase of short-term measures and go on to lasting budget consolidation.»

Such a move was «urgently necessary, in the view of the Europeans and particularly of Germany,» she said.

Obama urged the world’s leading economies Friday to avoid scaling back government spending too quickly or risk derailing the global recovery.