2024-08-03 20:25:19
The German economy unexpectedly shrank in the first quarter. The FDP is calling on Habeck to provide a new “economic boost”. His State Secretary Franziska Brantner has made a suggestion.
In the debate about Germany’s weak growth, the Parliamentary State Secretary in the Ministry of Economic Affairs, Franziska Brantner (Greens), has spoken out in favor of more investment through additional special funds. “If Germany is to gain more clout, it needs more investment,” Brantner told t-online. “The BDI has just proposed clearly targeted special funds, and we strongly support that.”
The Federation of German Industries (BDI) believes that an additional 400 billion euros in investment will be necessary over the next ten years. It proposes setting up individual special funds financed through debt for the various tasks – such as infrastructure, daycare centers and schools, housing construction and climate protection. The FDP has so far opposed new debt.
The traffic light government recently passed a so-called growth initiative with the budget for 2025. The package includes 49 measures to stimulate the economy, including tax relief, improved depreciation options and reducing bureaucracy. The traffic light government hopes that this will lead to an increase in economic growth of 0.5 percentage points next year. However, economic researchers are skeptical as to whether the package will actually achieve that much.
FDP General Secretary Djir-Sarai now called for further “decisive structural reforms in taxes, levies and the welfare state as a whole.” Habeck’s State Secretary Brantner said: “We are open to further structural reforms. But we should now boldly implement together what we have just agreed on.” The majority of the measures from the growth initiative are not yet in force.
The German economy unexpectedly shrank in the second quarter. Gross domestic product fell by 0.1 percent from April to June compared to the previous quarter, the Federal Statistical Office announced on Tuesday. Investments in equipment such as machinery and in buildings in particular have decreased. In the first quarter, there had been an increase of 0.2 percent.
This means that Germany is lagging behind other large eurozone countries. By comparison, France managed an increase of 0.3 percent in the spring, and Spain even achieved 0.8 percent. The prospects for an upturn in the second half of the year have recently become cloudy. The Ifo business climate index fell in July for the third month in a row.
However, the mood among consumers had recently brightened noticeably – also due to the European Football Championship in their own country. The willingness to make major purchases is higher than it has been since March 2022, as consumer researchers at GfK and the Nuremberg Institute for Market Decisions (NIM) have determined.