UK’s Brown to meet Merkel on economy after tiff

British Prime Minister Gordon Brown will hold talks on the economy with German Chancellor Angela Merkel in Berlin next Wednesday, after signs of tension emerged between the two EU heavyweights.

A day before the Berlin meeting, Brown will also hold talks with visiting U.S. Federal Reserve chief Ben Bernanke, who is in London to give a lecture at the London School of Economics.

Last month, Germany and Britain, two of Europe's biggest economies, became embroiled in a diplomatic row over how to tackle the credit crunch which is sending much of the continent tumbling into recession.

The prime minister will discuss the financial situation with both Merkel and Bernanke, a spokesman said.

Brown's government is spending billions of pounds of borrowed money on an economic stimulus plan designed to stop the downturn turning into a slump and is urging other countries to follow suit.

But Peer Steinbrueck, Social Democrat finance minister in Germany's conservative-led coalition government, was quoted in Newsweek last month as saying Britain was adopting untested policies that could saddle it with debt for a generation.

An economic adviser to Merkel made similarly critical remarks in the media.

Germany has also made clear it was piqued at having been left out of economic crisis talks in London last month between the leaders of Britain, France and the European Commission.

However, Merkel's coalition partners are now trying to hammer out a new economic stimulus package, which could total 50 billion euros ($67.78 billion) and which the partners hope to finalise next week.

French President Nicolas Sarkozy held talks with Merkel in Paris on Thursday. He said after the talks that European leaders from G20 nations would meet in Berlin in the coming weeks to draw up a joint approach before a full G20 summit on the financial crisis, to be held in Britain in April.