FORMER GERMAN chancellor Gerhard Schröder has warned that EU crisis countries face “strangulation” unless the fiscal pact is complemented with a growth component.

The former German leader insinuated that his successor, Chancellor Angela Merkel, had cost Europe time, money and voter trust by insisting early on in the crisis that German taxpayers would not be asked to contribute to financing rescue measures in Greece, Ireland or elsewhere.

“Saving alone is no way to overcome this crisis. There is a danger … that rigid austerity measures imposed from outside could result in the strangulation of crisis countries,” said Mr Schröder at the Hertie School of Governance. “We have to add a growth component to the fiscal pact.”

The former chancellor called for more spending on research and development, financed by cuts in agricultural spending and revenue from a financial transaction tax “implemented, if necessary, in the euro zone alone”. Cautious yet outspoken, Mr Schröder sent the strongest signal yet that he shares ex-chancellor Helmut Kohl’s unhappiness with Dr Merkel’s crisis management. Without mentioning her by name, Mr Schröder suggested she had “set a trap” for herself by insisting that German taxpayers would not contribute to a euro zone rescue plan – a position she later conceded.