Economic alarm: Fuest demands radical reforms for Germany!

Economic alarm: Fuest demands radical reforms for Germany!

Prof. Dr. Clemens Fuest, President of the ifo Institute, presented a clear analysis of the current situation in the German economy at the IHK annual reception in Heidenheim. The renowned economist expressed sharp criticism of German economic policy and warned of “unprecedented growth weakness” that has persisted since the Corona crisis. Loud Swabian Post Germany is at the bottom of economic development compared to the G7 countries.

The stagnating German economy is showing alarming signs, which Fuest attributes to structural errors. Investments have been collapsing and the volume of work has been falling for three years. These trends are reinforced by a demographic aging of the population, as well Economic service determines.

Call for structural reforms

Fuest calls for a comprehensive and long-term agenda that includes targeted investments, faster approvals and tax relief for work and innovation. While he points out the need to make work worthwhile again in order to improve the quality of life for many families, he also emphasizes the low annual working hours in Germany compared to other industrialized countries. This situation is due not least to gaps in care, especially for women, and a high level of part-time employment.

Another key problem is the declining employment rate of older workers, which is caused by the retirement of the baby boomers. This leads to a decline in the production potential that Fuest and the Economic service as one of the biggest challenges for the German economy.

Technological progress is the key

Fuest also warned that Europe is falling behind in technology, while the US is leading in research spending and business creation. In his speech, he highlighted the positive development of over 30 unicorns in Germany, but called for more venture capital and the creation of start-up centers.

emphasizes that in order to mitigate the demographic effects, working lives should be increased and women's employment should be promoted. Technological progress and efficient use of resources must also be promoted in order to increase production potential and improve productivity.

Looking into the future

IHK President Markus Maier shared the concerns about Germany as a location and criticized a culture of debate that focuses too much on leisure demands. He recalled that productivity is the key to economic success and that Germany should not rest on past successes. Thilo Rentschler, General Manager of the IHK, pointed out the upcoming measures such as the future offensive and the new “Master Plan 2.0”, which focus on innovation, infrastructure, energy transition and resilience.

In summary, Germany faces the urgent need to initiate structural reforms and address the diverse challenges of demographic change and the stagnating economy. Without these measures, the growth forecast for the coming years will remain bleak.