As of: February 20, 2024, 4:48 a.m
By: Bona Hyun
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The German economy is apparently facing its biggest crisis in two decades.
Leading economists are calling on the federal government to take action.
Berlin – The development of the German economy is currently reminiscent of dark times.
First of all, the economy contracted in two consecutive years (2002 and 2003).
Now this could happen for the second time.
Economics Minister Robert Habeck (Greens) was already preparing Germany for tough times, as the German economy was doing “dramatically badly”.
According to top economists, the federal government is a cause of economic weakness.
Ways for Germany out of the economic crisis – the federal government as the cause?
This is the opinion of the President of the Ifo Institute,
Clemens Fuest.
Fuest demands that the federal government must overcome its internal differences in order to create certainty about the future course of economic and climate policy.
“Political uncertainty
in Germany is currently as high as it was in Great Britain in the year of Brexit,” he told the
Tagesspiegel.
Concern about the economic crisis in Germany is growing.
Economists have clear demands on the traffic lights.
© Christoph Soeder/dpa
According to Fuest, tax cuts for companies are also necessary.
Finance Minister Christian Lindner (FDP) and Economics Minister Habeck had already announced that they wanted to relieve the burden on companies.
According to the
MDR
, they want to work together on tax reform for companies and further relief for the economy in order to make German companies more competitive.
However, the ministers appeared open to working together on measures.
Germany in the economic crisis?
Economist calls for withdrawal of the deduction-free pension
Recently there have been increasing disputes in the federal government - one consequence of which was that the 2024 federal budget was only passed late.
Chancellor Olaf Scholz (SPD) announced cuts and savings in order to implement the budget ruling of the Federal Constitutional Court.
Climate-damaging subsidies would be abolished, expenditure by individual departments would be reduced and federal subsidies would be reduced.
But not only disagreements, but also a lack of long-term planning could become a problem for the German economy.
As an example, Oliver Holtemöller from the Leibniz Institute for Economic Research in Halle tells the
Tagesspiegel
a long-term plan on how the emissions reduction targets anchored in the German Climate Protection Act should be achieved by 2045.
If structural problems were addressed convincingly, confidence among households and companies would grow again.
The result: more consumption and investment is taking place again.
Pension withdrawal as a way out of the economic crisis for Germany?
Holtemöller also calls for the strengthening of the workforce and the stabilization of social spending.
One way to do this is to take back the pension without deductions
from 63 years.
Prof. Bernd Raffelhüschen asked
IPPEN.MEDIA
the same thing .
He spoke of a “blatant injustice” of early retirement without discounts and emphasized the importance of making employment more attractive for older employees.
“The largest reservoir we have in Germany are these older employees, the skilled workers in the baby boomer age group.”
Raffelhüschen is an economist and generational researcher at the University of Freiburg.
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Retirement at 63 has been at the center of the debate for a long time.
The model means that more skilled workers in particular are retiring early.
According to reports from the German Pension Insurance (DRV), around 300,000 people took advantage of the early exit from working life as part of their pension at 63 in 2023.
Concern about the economic crisis in Germany – “bad mood” among companies
Concern about the economic situation in Germany is affecting the mood of companies.
“The bad mood among companies is becoming more entrenched,” said the business association.
The German Chamber of Commerce and Industry (DIHK) expects a decline of 0.5 percent after surveying more than 27,000 companies from all sectors and regions.
In 2023, gross domestic product fell by 0.3 percent.
The survey was published on Thursday (February 15).
One trend was particularly worrying: 33 percent of companies stated that they wanted to reduce their investments in Germany.
Only 24 percent plan to expand.
After a brief recovery in the summer of 2023, the negative trend will continue, according to the DIHK.
(bohy)