German Chancellor Angela Merkel is facing a challenge to her tough line on fiscal austerity as unemployment continues to rise across the eurozone and the region faces up to the threat of a prolonged recession, dpa reported. Hope of an early recovery from recession suffered another setback this week following figures showing the number of jobless in France and Spain swelling to record levels and key economic indicators gave a negative outlook. This has led to calls for a shift away from the fiscal austerity spearheaded by Merkel and added to expectations that the ECB will deliver a 25-basis-point cut in interest rates next week to spur growth. Italy's prime minister-designate Enrico Letta this followed up remarks by European Commission President Jose Manuel Barroso on easing fiscal austerity, saying Europe's policy of budget consolidation was "no longer sufficient." Merkel helped to fuel speculation about ECB's next move on rates when she took the highly unusual step of entering the debate on the Frankfurt-based central bank's deliberations on monetary policy. -- SPA 18:53 LOCAL TIME 15:53 GMT تغريد
