Berlin - Frank-Walter Steinmeier who heads up the German Social Democrats' ticket for this year's national election moved Monday to promote restoring economic confidence as a key campaign issue as Europe's biggest economy faces up to a dramatic slump.

In an interview with the London Financial Times, Steinmeier, who is also vice-chancellor and foreign minister, said: "To recover from this will require more than crisis management ... It will take many years of work to restore people's confidence in this economic system and its rules."

The Social Democrats (SPD) have selected Steinmeier as their chancellor-candidate to head up the party's challenge to Chancellor Angela Merkel's conservative bloc at national elections set down for September.

But coming amid signs of rapidly contracting German economic growth and accelerating unemployment, Steinmeier set out in the Financial Times interview an agenda that includes tough new rules for investors, shareholders and managers in Germany.

The publication of the interview came just a day after Merkel chaired a meeting in Berlin of the European Union's (EU) major economies, which drew up an action plan for overhauling the global financial system and combating the world economic crisis.

The proposals are to be presented to the London summit of the leaders of the Group of 20 (G20) leading industrial and emerging economies in April.

After stepping back from the deliberations surrounding the last G20 leaders' meeting in Washington in November, Merkel used the Berlin meeting to signal that she is keen to play a leading role in shaping the international agenda for tackling the global financial and economic crisis.

Several of the financial market reforms that Merkel has been calling for were included in the package measures that the EU leaders will take to the London summit.

Apart from calling the meeting, this included a crackdown on hedge funds and endorsing a charter aimed at forging sustainable economic growth.

The economic reform plan outlined by Steinmeier to the Financial Times forms part of the SPD's effort to raise its profile as the campaign for the national election slowly starts to crank up with polls showing the SPD trailing badly behind Merkel's Christian Democrat-led bloc.

In his comments to the Financial Times, Steinmeier, who is part of the grand coalition government headed up by Merkel, said that aggressive government intervention rather than measures to boost consumption or tax cuts were needed to help shield Germany's industrial base from the global recession.

"The turbo-capitalism of the past few years is dead, irrevocably so," Steinmeier told the Financial Times.

"We must now create a new order for the future," he said.

"The conditions for this are auspicious," he said. "This shock is deep, not only in continental Europe but in the US and UK. In this situation there is not just an opportunity but a duty to act."

Steinmeier also warned that Germany's business culture was changing. "Many shareholders became interested primarily in short- term success," he said.

He also proposed changes to capital gains tax regarding shares, criticized fair-value accounting, which he said had encouraged risk- taking, and called for limits on the amount of debt private equity investors should be allowed to use when taking over businesses.

"We do not want to destroy private equity, but we must establish new limits to the amount of debt these investors can raise to make acquisitions," Steinmeier said. (dpa)