Nov. 9 (Bloomberg) -- European leaders’ decisions last month to stave off the debt crisis only bought a “window of time” to fix the euro, Chancellor Angela Merkel’s economic advisers said as they slashed a forecast for 2012 German growth.

Steps to increase the muscle of the European Financial Stability Facility will act as a temporary salve to the euro crisis, the panel of independent economic advisers wrote in an annual report published in Berlin today. They forecast growth next year in Germany of 0.9 percent after 3 percent in 2011. The government forecast growth this year of 1 percent.

“The current package is no sustainable solution for the problems of the euro area,” the panel said in its report. “But it opens a window of time to policymakers that they must use decisively to create a political framework for the euro area marked not only by solid state finances but also a stable financial system.”

The panel said there’s no certainty that measures taken by leaders at an Oct. 26 summit will return confidence to markets in the short term, “and certainly not permanently.”

The panel proposed a “redemption fund” backed by euro member states’ gold reserves that would be worth 2.3 trillion euros ($3.1 trillion) and help governments scale back outstanding debt to below 60 percent of economic output. The fund would be an alternative to the European Stability Mechanism, the permanent bailout fund scheduled to come online in 2013, and accompanied by a pledge by states to anchor debt limits in their constitutions, the panel said.

A German exit from the bloc of euro members would bring about more disadvantages than benefits for the export-dependent economy, the advisers said. The government would have to find ways to protect exporters from “instabilities and shocks” coming from volatile markets, which comes at a price, the advisers said. It wouldn’t be a “solution” for Greece to leave the euro as a collapse of the country’s financial system would be unavoidable and inflation would surge, they said.

--With assistance from Rainer Buergin in Berlin. Editors: Alan Crawford,

To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net; Brian Parkin in Berlin at bparkin@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net