Jan. 26 (Bloomberg) -- German Chancellor Angela Merkel said that pursuing economic growth and budget consolidation are not mutually exclusive.

“Nobody says,” that austerity is the only solution, Merkel told reporters in Berlin today after talks with Spanish Prime Minister Mariano Rajoy. At the same time, the European Union needs government spending cuts because running up debt “put the EU in the markets’ sights,” Merkel said.

To contact the reporter on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net

To contact the editor responsible for this story: Alan Crawford at acrawford6@bloomberg.net