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Germany is the “tired man” of Europe, admits Finance Minister

by SuperiorInvest

BERLIN, GERMANY – NOVEMBER 15: German Finance Minister Christian Lindner gives a statement to the media at the Chancellery following the weekly government cabinet meeting on November 15, 2023 in Berlin, Germany. At issue was a ruling by the German Constitutional Court that declared illegal the transfer of federal money by the coalition government in 2021 originally intended to alleviate the consequences of the coronavirus pandemic and which had not been used for climate change mitigation measures. (Photo by Sean Gallup/Getty Images)

Sean Gallup | Getty Images News | fake images

Germany’s finance minister on Friday offered a new analogy for his country’s ailing economy, after months of debate over whether Europe’s traditional powerhouse had become “Europe’s sick man.”

“I know what some of you are thinking: Germany is probably a sick man. Germany is not the sick man,” Christian Lindner told delegates at the World Economic Forum in Davos, Switzerland, at a Bloomberg panel on Friday.

Lindner stated that “after a very successful period since 2012 and this year of crisis, Germany is a tired man after a short night.”

References to Germany as the “sick man of Europe” resurfaced last year. The economy avoided recession at the end of 2023, but contracted 0.3% year-on-year, as it battled high energy costs, inflation and interest rates. Germany’s manufacturing output, excluding construction, fell 2% in 2023.

The title “sick man” was first used to describe Germany’s economy in 1998, as the country navigated the costly challenges of a post-reunification economy.

“Wake-up call” on growth

Lindner said that “expectations of low growth are partly a wake-up call, and now we have a good cup of coffee, which means structural reforms, and then we will continue to be economically successful.”

The latest data suggests the German economy is facing a prolonged slump, with research firm Capital Economics forecasting no growth for the country in 2024.

Germany faced a budget crisis late last year after a constitutional court ruled that its reallocation of unused debt was illegal for violating the country’s fiscal rules.

After negotiations, Germany reached a budget agreement that kept debt restrictions in place for 2024. The government aims to save 17 billion euros ($18.51 billion) in its budget with cost cuts and ending harmful subsidies. climate.

Speaking on the WEF panel on the global economic outlook on Friday, Lindner said: “We had to solve our debt and deficit problems, which has made me… the loneliest minister in the cabinet, but we managed to solve our debt problems. debt”.

— CNBC’s Ruxandra Iordache and Hannah Ward-Glenton contributed to this story.

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