Austerity, or the consolidation of public and private budgets, is not an impediment to growth, the German ambassador to Ireland has said.

He said one of the causes of the crisis has been “excessive public debt” and that living within our means is a pre-condition for long-term sustainable growth.

Dr Eckhard Lubkemeier said member states needs an open and frank discussion about their differences and then come to a compromise, adding Germany needs strong and prosperous neighbours in Europe because Europe will always remain its 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 told RTE’s Morning Ireland programme.

In relation to today’s German Constitutional Court hearing, Dr Lubkemeier said he does not believe the ECB’s moves to save the euro breached its mandate.

“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.”