The week started again with bad news for the German economy: German companies unexpectedly cut production in June. The Federal Bureau of Statistics calculated that German companies from the fields of industry, construction and energy in June reduced their production compared to last month by 1,5 percent.
Recently, the International Monetary Fund warned that Germany is the only one of 20 countries and regions where the overall economic performance will decrease on an annual basis. And it is the largest economy of the European Union.
Germany again "sick of Europe"?
Is Germany again "Europe's sick man", as the British magazine "Economist" claimed on the front page at the end of the last century? Reinhard Huben, the representative of the German Liberals (FDP) in charge of economic issues, is not of that opinion: "I consider the name 'sick of Europe' to be exaggerated at the moment. But it is true that we have an economic stagnation."
Unlike Huben, a member of the ruling coalition, the opposition uses the opportunity to increase pressure on the government. Therefore, it should not be surprising that the Christian Democrats (CDU/CSU) adopted a document they call an "emergency program" against economic stagnation. The head of the Christian Democratic Union (CDU) Friedrich Mertz wrote on the networks that the CDU and the CSU have worked out a joint emergency program so that "the recession does not turn into a long-term weakening of economic performance."
In that program, for example, a reduction in taxes on electricity and the electricity network is requested, already from October. Laws that cause more bureaucracy in companies should be stopped. In the future, overtime work would have to be tax-exempt, as would inheritance of the parental home. In addition, businesses would have to get tax breaks to get the economy moving again.
Huben is skeptical of those proposals, which he says are "shot from the hip." "Right now I still can't recognize the program in it." He cites the example of the tax that is paid when an apartment or plot is bought and asks why the Christian Democrats have not started with it in those provinces where they have prime ministers.
"The amount of that tax is in the jurisdiction of the provinces," he says, and also cites an example of reducing bureaucracy in companies - the Ministry of Justice has long since started work on it and the opposition knows it. Huben points to the 50 tax measures proposed by Liberal Finance Minister Christian Lindner.
The so-called "Law on Growth Opportunities"
The ruling Social Democrats and the Greens also demand to help the economy and are not as reserved as the Liberals. They want to strengthen the economic cycle and stimulate the economy.
Co-chairwoman of the Greens Rikarda Lang demands a "joint package" of all three parties of the ruling "traffic light coalition" in order to "defend the economic foundation of the German economy". She said in the newspaper "Bild am zontag" that there are already "good discussions" about it. She sees unmet needs in the German railways, in preschools and in digitalization.
Economy Minister Robert Habek, also from the ranks of the Greens, at the same time praises Germany as a place for business: "Currently, more than twenty companies are planning large investments of around 80 billion euros," Habek told the German media.
Co-president of the German Social Democrats, Zaskija Esken, spoke in favor of subsidized electricity prices and investments in infrastructure. The Social Democratic Minister of Construction, Klara Gajvic, proposed to work out a plan for a larger return of funds during the construction of apartments.
In the German Institute for Economic Stimulation (DIW), the prevailing opinion is that the government should resist the pressure and not introduce new economic measures with subsidies and tax cuts, which would only give additional billions of euros to the powerful business lobby. It "would not change the economic problems", according to the director of the Institute, Marcel Fracher.
And where is the chancellor?
German Chancellor Olaf Scholz has not yet spoken out about the economic crisis. He was on vacation until Monday. But the pressure on him is increasing. The Christian Democratic opposition demands that the chancellor declare the crisis as his priority. Even financial experts from among the coalition partners, such as Huben, advise him to address the public.
However, there is also positive news from the German economy, which is the fourth strongest in the world. The Taiwanese concern TSMC intends to build large facilities for the production of chips in Dresden, and its partners will be Bosch, Infineon and NXP. According to the newspaper "Handelsblat", the state will subsidize the construction with five billion euros. Economy Minister Habek says that this news is an extremely important signal for Germany as an attractive place for investments.
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