German minister sees German economy in rough waters
Published: Wednesday, Feb 21st 2024, 15:40
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Economics Minister Robert Habeck sees the German economy in "rough waters". We are emerging from the crisis more slowly than we had hoped," said the Green politician in Berlin on Wednesday at the presentation of the annual economic report.
The German government is only expecting a mini growth rate of 0.2% this year. In its fall forecast, it was still expecting growth of 1.3 percent. Last year, the German economy slipped into recession.
According to Habeck, the reasons for the gloomy economic situation include the historically low growth in global trade, which is particularly difficult for an export nation like Germany, as well as high interest rates, which are hampering companies' investments. He also referred to the federal government's need to make savings following a budget ruling by the Federal Constitutional Court.
Habeck also cited structural problems in Germany that had built up over many years. A "reform booster" is needed, and the federal government must now work on this. "It is about nothing less than defending the competitiveness of Germany as an industrial location." Habeck referred to the labor shortage, for example.
However, there are different ideas about additional relief within the coalition. Habeck had proposed a billion-euro, debt-financed special fund - the FDP rejects this. A growth package already approved by the Bundestag is in danger of failing due to opposition from the CDU/CSU. The mediation committee of the Bundesrat and Bundestag will meet on Wednesday evening.
©Keystone/SDA
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