As of: February 15, 2024, 9:03 a.m
By: Amy Walker
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Economics Minister Robert Habeck speaks honestly about the situation in the German economy during his visit to Leipzig.
Germany is experiencing a “perfect storm”.
Leipzig – If the economics minister doesn’t have good news, then things are really going wrong in the country.
During his visit to Leipzig, Robert Habeck (Greens) did not shy away from clear words: Things are going “dramatically badly” in the economy at the moment, and the economic forecast for the current year has therefore been significantly lowered to just 0.2 percent economic growth.
The Federal Minister of Economics is on a country tour through Saxony, Thuringia and Bavaria until Friday (February 16th), visiting a craft fair, companies and talking to citizens.
He already had a clear message at the start on Wednesday in Leipzig: things cannot continue like this.
Habeck breaks the situation down to three main problems
The minister called for the population to recognize that things can no longer continue as they did a few years ago: “Everyone has to get out of their – how should I put it – warm, cozy corners,” he said on the podium in Leipzig.
“The time for comfort is really over.”
Habeck breaks down the country's problems into three main aspects.
Point one: the Europeans should do more for their security and increase military spending - including Germany.
The background is that new military aid for Ukraine in the USA is shaky.
It is also about the possible re-election of Donald Trump in the US presidential elections in November.
The Republican had made it clear that he would not provide American support to allies with low defense spending in the event of a Russian attack.
Habeck's second point: Germany has long relied on cheap gas from Russia.
But that has now changed as a result of the Russian war of aggression against Ukraine.
And thirdly: Germany has long sold many, including high-quality, products to China.
But it is turning or is in danger of turning.
Taken together, these are the ingredients for a “perfect storm,” says Habeck - so it can be very uncomfortable.
Federal Minister of Economics Robert Habeck spoke plainly in Leipzig.
© Jan Woitas/dpa
“Now that the wind is really blowing across the country, it becomes clear what we have failed to address in the last few decades,” says Habeck: For example, he mentions the shortage of skilled workers, failures in infrastructure, too much bureaucracy and too much bureaucracy Dependence on China.
Habeck once again emphasizes his desire for a reform of the debt brake
Habeck has emphasized several times in the past few weeks and months how he would tackle the country's problems.
He would ideally like to reform the debt brake so that more debt could be taken out to transform the economy.
But this has become a red line for the coalition partner FDP that cannot be crossed.
As long as they appoint the finance minister, nothing can be done.
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However, Robert Habeck points out in Leipzig that some CDU prime ministers - such as Berlin's Kai Wegner - are now also advocating for reform.
From his point of view, it is the strict ruling from Karlsruhe that is now pushing the country into recession.
“The economic recovery will be slowed by this ruling,” he says.
Investments, for example, in stabilizing electricity prices can no longer be made, so consumers would have to cope with the high costs on their own.
This affects consumption.
Lindner considers the economic forecast to be “embarrassing”
While Habeck is in Leipzig, his opponent Christian Lindner (FDP) is also speaking on another stage in Brandenburg.
The FDP leader is at the political Ash Wednesday of the Brandenburg FDP in Potsdam.
Lindner warns that with a growth forecast of 0.2 percent, Germany will once again be in the bottom group of developed economic nations.
This is “embarrassing and socially dangerous.”
Lindner has also repeatedly rejected new debts.
He wants a “dynamization package” with 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.
With material from dpa