Germany in recession: Finance Minister calls for a turnaround in economic policy

Germany in recession: Finance Minister calls for a turnaround in economic policy

According to a report by www.tagesschau.de,

Germany is in recession. Finance Minister Lindner now called for a turnaround in economic policy. Chancellor Scholz and Economics Minister Habeck were confident. CDU leader Merz, however, spoke of a wake-up call.

According to Federal Economics Minister Robert Habeck, Germany's strong energy dependence on Russia is the most important reason why the German economy slipped into recession in the winter half of the year. The lack of gas deliveries had already made the economic situation more difficult since the summer. The federal government assumes that Germany can free itself from this crisis on its own. These prospects were based on the massive expansion of green electricity, increasing investments in battery or chip factories as well as investments in the expansion of the power grid and electricity production. As German consumers' spending has fallen due to rising prices, economists have published that Germany is technically in a recession.

Finance Minister Christian Lindner explained that the weak economic dynamics indicate that political action is necessary. He announced that the government will speed up planning and approval processes and attract more skilled workers. He also mentioned greater funding for research without increasing tax increases, but rather enabling further relief.

Union faction leader Friedrich Merz described the economic downturn as a wake-up call for Chancellor Olaf Scholz and criticized the lack of political leadership in a crisis. The Ifo Institute also warns of further complications and has little hope of an upswing. The International Monetary Fund (IMF) and the EU Commission expect only low economic growth for the year as a whole.

Given these circumstances, we must accept that the German economy is navigating difficult waters. A sustainable political and economic plan is needed to pull the economy out of this downturn. The strong energy dependence on Russia must be reconsidered and measures to promote research and make approval procedures more flexible must urgently be implemented. Otherwise, this could have far-reaching economic consequences both for Germany and for the entire European market.