Germany's foreign minister is defending the policy of budget consolidation in a number of European countries despite a blunt warning from a top European Union official that the 27-nation bloc's austerity drive "has reached its limits."

Guido Westerwelle said Tuesday in Brussels that going back to "the old policy of taking on new debt would cement mass unemployment in Europe for many years to come."

His comments follow Monday's admission from EU Commission President Jose Manuel Barroso that the austerity prescription of higher taxes and lower spending, though right in principle, may have hit the limits of public acceptance amid rising unemployment and recession.

Many economists say cutting budgets while the economy is weak further hampers growth and deteriorates a country's debt position.