As of: February 20, 2024, 10:13 a.m
By: Lisa Mayerhofer
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The increase in citizens' allowance at the beginning of the year was criticized by the head of the Halle-Dessau Chamber of Industry and Commerce.
(Symbolic image) © Sebastian Kahnert / dpa
The German economy is in the doldrums.
The President of the Halle-Dessau Chamber of Commerce and Industry fears a permanent crisis - and criticizes the increase in citizens' benefits and climate policy.
Halle – The weakening German economy concerns companies, politicians and economists.
The President of the Halle-Dessau Chamber of Commerce and Industry, Steffen Keitel, told MDR: “We are well on the way to an extended, permanent crisis.” He cites the increase in citizens' money and the fight against climate change as points of criticism of the current situation .
IHK boss criticizes increase in citizens' allowance and climate policy
Keitel specifically complained to the radio: “In times of great shortage of skilled workers, we pay millions of employable people to do nothing.
We have four million employable citizens’ benefit recipients, and we simply lack these four million in the economy.”
He is also critical of climate policy;
Unattainable goals should be corrected, said IHK boss Keitel according to MDR.
“I am definitely in favor of environmental protection, I am also in favor of climate goals, but when it comes to the country’s prosperity we also have to look at it from an economic perspective.”
Criticism from economists: “We should disarm a little verbally here”
However, the vice president of the Leibniz Institute for Economic Research Halle (IWH), Oliver Holtemöller, sees it differently.
A good social system is needed, especially in times of social change, he explains.
In addition, figures from the Federal Employment Agency suggest that millions of citizens' benefit recipients are, for example, children, trainees, schoolchildren or top-up people.
“We should disarm a little verbally here and think about how we can cope better with the demographics,” says Holtemöller, according to MDR.
He also does not believe it is appropriate to relax environmental protection, as this could instead create new uncertainties in the economy.
However, the economist also assumes that the economic outlook is rather bleak.
Weak economy: problems of our own making?
According to the President of the Halle Institute for Economic Research, Reint Gropp, the factors of the weakening economy, such as a lack of consumer desire and weak investment, are to some extent of the government's own making.
He identifies another problem: communication.
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The federal government is extremely bad at communicating a coherent strategy in the fight against climate change, demographic problems and to ward off geostrategic risks: “This lack of communication of a strategy leads to this uncertainty among both households and companies.” The government is persecuting you “Micro-directory approach” that doesn’t work well: “There will be far too little reliance on price signals and market mechanisms and too much on micro-control by the state.”
Forecast: The German economy is threatened with recession
According to the Bundesbank's forecast, the German economy may be at risk of a recession in the current first quarter due to the increasing number of strikes.
With the second decline in economic output in a row, it would be in a so-called technical recession.
In the fourth quarter of 2023, Europe's largest economy shrank by 0.3 percent.
According to insiders, the federal government expects only low economic growth for the current and next year.
For 2024, only an increase of 0.2 percent is estimated.
According to the draft annual economic report, an increase of 1.0 percent in gross domestic product (GDP) is expected for 2025.
Economics Minister Robert Habeck (Greens) will present the report on Wednesday.
With material from Reuters