As of: February 21, 2024, 11:05 a.m
By: Lisa Mayerhofer
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Federal Finance Minister Christian Lindner and Economics Minister Robert Habeck in the German Bundestag.
© Imago/dts news agency
On Wednesday, Economics Minister Habeck will present the eagerly awaited annual economic report.
But the traffic light coalition once again apparently did not agree on key points.
Berlin - The German economy is stumbling - this is one of the reasons why an item on the program on Wednesday is causing more of a stir than in previous years: Federal Minister of Economics Robert Habeck (Greens) is presenting the current annual economic report today (February 21, 2024).
In it, the traffic light coalition presents its economic policy guidelines.
This is sorely needed: Habeck had already announced last week that the government was lowering its growth forecast for this year from 1.3 percent to just 0.2 percent.
The Economics Minister described the economic prospects as “dramatically bad”, while Finance Minister Christian Lindner (FDP) called them “embarrassing and dangerous from a social perspective”.
Annual economic report: Habeck and Lindner disagree
Both ministers have clearly recognized the problem and want to strengthen the competitiveness of the economy.
But as usual, they cannot agree on a common line.
The measures mentioned in the annual economic report have a strong focus on the labor market and are formulated much more specifically there than in other areas.
According to the
Handelsblatt
, which has the report in advance, the term “transformative supply policy”, which the Ministry of Economics had wanted to use, was deleted.
The Ministry of Finance has turned against this, the newspaper reported from government circles.
What's behind it: Habeck would like to provide government support for companies in their transformation to climate neutrality, while Lindner would prefer a dynamization package with an increased reduction in bureaucracy.
But it looks like no concrete tax reforms will be presented as a result; the same applies to financial policy (apart from a commitment to the debt brake).
Concrete proposals for labor market policy – until Heil intervenes
The labor market policy proposals are more concrete, such as a family start-up period, i.e. paid leave after the birth for the father too.
In addition, for example, it should be made easier for people who receive state benefits such as citizen's benefit to earn extra money.
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A proposal will also be examined to require companies to provide more transparent information about wages.
“People in the low-wage sector in particular often have incorrect ideas about their earning potential with other employers,” says
Handelsblatt
in the annual economic report.
Then things get thin here too: As the newspaper reports, at the request of Labor Minister Hubertus Heil (SPD), proposals from the Ministry of Economics to give low earners and pensioners more incentives to work were deleted.
Overall, it is questionable whether the measures mentioned will be enough to stimulate the economy again or whether more far-reaching reforms - for example in bureaucracy and taxes - can be followed up.
Union calls for “multiple oomph” for the economy
Meanwhile, the Union is calling on the government to give the economy a “multiple boost”.
“I am very concerned about what lies ahead and where we are currently in economically,” said the economic policy spokeswoman for the CDU/CSU parliamentary group, Julia Klöckner.
“Germany is the economic nation that is not only not growing, but is shrinking.
And the others are passing us by.” This costs a lot of wealth and cohesion in society.
“That’s why it’s all in: immediate program for the economy, economic transition and growth transition.”
The Union parliamentary group is proposing an immediate program with a package of measures.
Specifically, it involves, for example, a “brake on the burden and bureaucracy”, more flexible working hours, capping non-wage labor costs at 40 percent, a reduction in corporate taxes or “super depreciation”.
With material from dpa and AFP