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Cancel a holiday? Ifo boss Fuest warns of economic risks!
Clemens Fuest calls for the cancellation of a public holiday to strengthen work performance in Germany and to support the economy.
Cancel a holiday? Ifo boss Fuest warns of economic risks!
Clemens Fuest, President of the Ifo Institute, has made recent statements in favor of canceling a public holiday in Germany. This step is not only intended to alleviate the financial challenges but also respond to the acute labor shortage in the country, such as MDR reported. Fuest emphasizes that Germany is facing major challenges, including the necessary expansion of the arms industry to defend against external threats. In order to finance this, a large special fund will be set up for infrastructure, although this will involve taking on additional debt.
Fuest points out that despite the financial resources made available, actual work on the infrastructure cannot yet begin. The performance of the economy is limited, which is why an increase in work performance is urgently needed to enable investments in infrastructure and armaments.
Labor shortages and government spending
Additionally, Fuest argues that new, debt-financed government spending could stimulate demand. However, this additional demand is reaching an already busy economy with an acute labor shortage. To counteract this, he emphasizes the urgency of increasing the labor supply. Canceling a public holiday could be a suitable measure to make more workers available.
Fuest is calling for a more comprehensive concept from the future federal government than just the announced special fund and the easing of the debt brake. He cites a “triad” as necessary for economic stability: supply-side reforms such as deregulation and reductions in bureaucracy, savings and reallocations in the federal budget, and sensible debt, particularly for short-term financing of defense, such as NOZ reported.