Living within your means is a pre-condition for long-term sustainable growth, according to Dr Eckhard Lubkemeier, the German Ambassador to Ireland.
Speaking on Morning Ireland, the German Ambassador said the German position is that austerity - or the consolidation of public and private budgets - is not an impediment for growth.
He said criticism of Germany "is perfectly legitimate". He says Germany has its own view and respects that others have their point of view - that this is perfectly legitimate in a European family.
Dr Lubkemeier said what we need to do is have an open and frank discussion about our differences and then come to a compromise, and that's how the European Union works and that's what we have been doing for the past years.
"We need strong and prosperous neighbours in Europe because Europe will always remain our most important trading place. There cannot be prosperity in Germany without prosperous neighbours. The issue we have been debating with some of our critics is whether austerity is an impediment for growth. Our position is that living within your means is a pre-condition for long-term sustainable growth,'' Dr Lubkemeier said.
He said Germany had shown solidarity to its neighbours and would continue to do so because there cannot be a stable and prosperous Germany without stable and prosperous neighbours.
Dr Lubkemeier said there is concern and opposition among the German people that too many liabilities are being taken on in the process of extending solidarity to its euro zone neighbours. He added, though, that all of the decisions had been taken by a broadbased majority in the German Bundestag, with the government and the Chancellor Angela Merkel enjoying a very high approval rating, not least because of its euro zone policy.
On today's hearing at the German Constitutional Court, Dr Lubkemeier said Germany supports the policy of the European Central Bank and he does not believe its moves to save the euro breached its mandate.
The Court is sitting for a second day to assess whether a policy, set up to calm the bond markets, is contrary to German law.
Dr Lubkemeier quoted the German Finance Minister - Wolfgang Schauble - as saying he did not see OMT as violating the Treaty and the mandate of the ECB. He said the ECB has the implicit backing of the German economy because without that the ECB would never have been able to do what it has done in the past.
"We don't need a court hearing to realise that there are design flaws in the euro. The crisis has made us realise that yes we need to correct certain problems that have come to the fore in the course of the crisis. We all realise that we have to go back to the drawing board, and that's what we've been trying to do for the past three years or more,'' he stated.
"For example putting our common currency on a more firm footing when it comes to public budgets. We have concluded a Fiscal Treaty which will bring more oversight and discipline to public budgets. I should stress, one of the causes of the crisis has been excessive public debt,'' he said.
