The all-risk mentality of the German economy: A financial expert criticizes the threats to Germany's future viability

The all-risk mentality of the German economy: A financial expert criticizes the threats to Germany's future viability

According to a report by www.l-iz.de says Marcel Fratzscher, President of the German Institute for Economic Research (DIW), concerned about the increasing calls for subsidies and tax cuts from companies and business associations. Fratzscher criticizes the “all-inclusive mentality” of the German economy and emphasizes that companies made high profits in the “golden decade” but did not invest them in future technologies.

Fratzscher criticizes the calls for tax cuts as a false narrative, as only increased redistribution from bottom to top has taken place in the past 20 years. He also warns of the “de-industrialization” of Germany due to three major risks that companies have taken: missing the ecological and digital transformation, investment dependence on China and Russia and the dangerous concentration of supply chains.

This development not only has an impact on the competitiveness of companies, but also on government finances. According to Fratzscher, the state's extensive guarantees for companies are creating a growing mountain of national debt. The “all-inclusive mentality” of the economy leads to a redistribution of risks and costs from companies to citizens and from rich to poor.

The analysis shows that the German economy is facing major challenges and a change in investment and subsidy policy is necessary to secure Germany's future viability.