As of: February 15, 2024, 5:01 p.m
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Federal Minister of Economics Robert Habeck is on a country tour through Saxony, Thuringia and Bavaria.
© Jan Woitas/dpa
0.2 percent: This downward adjustment of the government's economic forecast could add new fuel to the traffic lights.
What follows from this?
There are farmers' protests during Habeck's country tour.
Jena/Erfurt - It's bad news.
The German economy is not getting anywhere this year either.
The federal government only expects mini-growth of 0.2 percent.
Economics Minister Robert Habeck (Greens) called it “dramatically bad” and Finance Minister Christian Lindner (FDP) even called it “embarrassing and dangerous from a social perspective”.
But what now?
The gloomy economic outlook is increasing the pressure on the federal government.
And the farmers' protests continue.
During Habeck's visit to Floh-Seligenthal in Thuringia, demonstrators with tractors blocked an access route to a factory owned by the nougat manufacturer Viba - however, Habeck arrived there by a different route and visited the factory.
Posters read: “Too much is too much” or “traffic lights ruin agriculture”.
There have been protests nationwide for weeks because the federal government wants to abolish tax breaks for agricultural diesel.
No rapid economic recovery in sight
Last year the German economy slipped into recession.
There is currently no improvement in sight.
At the start of a three-day country tour through Saxony, Thuringia and Bavaria, Habeck announced at a craft fair in Leipzig that the federal government would significantly lower its economic forecast for this year - Habeck will present the annual economic report next week.
In its autumn forecast, the government had assumed growth of 1.3 percent this year.
FDP leader Lindner said at the Brandenburg FDP's political Ash Wednesday in Potsdam that with a growth forecast of 0.2 percent, Germany would once again be in the bottom group of developed economic nations.
Habeck wants to release the brakes
On Thursday, Habeck visited the technology group Jenoptik in Jena.
He said growth of 0.2 percent was “not satisfactory in any way.”
With a view to the weak global economy, the minister said that not all problems would be solved, but that "homework" had to be done - and growth impulses provided.
“The economic situation is diverse, but there is a very clear mandate as to what we have to do.” Habeck called for faster de-bureaucratization and, given the many vacancies, quicker placement of people in the job market.
The shortage of skilled workers is a brake on growth.
More money from the state?
Habeck said he received many inquiries from companies that would like to build a factory in Germany - but they told him they needed the same conditions as in the United States.
The USA attracts companies with massive government incentives.
Germany has decided to spend money more restrictively.
“If there are more funds, then there is no one who will be happier than me.”
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Habeck had brought a billion-dollar, debt-financed special fund into play to finance tax relief for companies and stimulate the economy.
The FDP, however, insists on adhering to the debt brake and rejects tax increases.
And the SPD is unlikely to go along with cuts in social benefits.
Habeck and Lindner actually agree in their analysis: Germany's companies are at risk of no longer being competitive internationally because of a high tax burden or high energy costs compared to other countries.
But the countermeasures are controversial.
In Leipzig, Habeck said, without naming the FDP: He believes it is the moment when everyone has to leave their “favorite places”.
The background is also that a planned growth package in the mediation process with the states is much smaller than actually planned.
Lindner wants a “dynamization package” with broad relief for companies, for example in the labor market, energy prices, bureaucracy and taxes.
He suggested completely abolishing the solidarity surcharge.
But this is controversial among the SPD and the Greens.
FDP parliamentary group vice-president Christoph Meyer said: “Crippling bureaucracy, high electricity prices, oppressive taxes and fees and too little digitalization cannot simply be subsidized away.
Each of these points must be addressed specifically with measures.” Unfortunately, Habeck’s ideas went in the direction of an economy based on “state-financed subsidies”.
That doesn't have much to do with the market economy.
Habeck should rather send suggestions that can be agreed upon to the coalition partners.
Business is pushing the government to act
Dieter Bauhaus, President of the Erfurt Chamber of Industry and Commerce, said after a conversation between entrepreneurs and Habeck: “One of our basic problems is that we have the impression that business is not listened to enough.”
“The government has no better alternative than to get started,” said the managing director of the German Chamber of Commerce and Industry, Martin Wansleben, in Berlin.
“The crisis is here.” The poor general conditions and the frustration of companies pushed down domestic investment plans.
What is needed is a strong signal of departure and long-term, reliable, business-friendly framework conditions.
Warning about the AfD
There isn't much time left for the traffic lights.
The new state parliaments in Saxony, Thuringia and Brandenburg will be elected in September, and the AfD is threatened with election victories.
Habeck warned in Erfurt that a country that wants to prosper economically must be open - open to exchange, to trade in goods and to people who work here - and it should not send signals "that people who are here are not Meier, Müller or Habeck are not welcome.
In addition to everything else when it comes to values, norms, moral standards: This destroys prosperity.” dpa