2024-06-23 04:48:27
Germany in a everlasting disaster: The economic system is weakening and the state is in need of cash. Can we nonetheless flip issues round? A dialog with prime economist Clemens Fuest.
Issues are usually not going effectively in Germany. Whereas different nations are rising, the German economic system is stagnating and is falling behind as compared. Is there nonetheless hope for enchancment? And in that case, what is going to it take?
t-online spoke to Clemens Fuest, one of many nation’s best-known economists, about this. In an interview, the president of the Munich-based Ifo Institute explains the implications of the house European Championships for Germany, criticizes the pension plans of the visitors gentle coalition – and explains why Chancellor Olaf Scholz could possibly be proper on one essential level.
t-online: Mr. Fuest, after two victories the nationwide group is within the spherical of 16. What are the probabilities of a second summer time fairytale?
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Clemens Fuest: In soccer, Germany may really expertise a summer time fairytale – however I hardly anticipate any optimistic impulses for the economic system from the European Championships at house.
The financial influence of such sporting occasions is simply too small. Knowledge from the previous exhibits that just a few hundred thousand followers come to the nation for a European Championship, the place they eat, drink and keep in a single day. However within the host cities, this drives up resort costs a lot that different vacationers keep away. So it balances out. And the retail sector solely advantages from the European Championship for a really brief time: in line with our estimates, client spending will increase by round one billion euros. That is not nothing, nevertheless it’s not very a lot both.
However the temper within the nation ought to a minimum of enhance.
Certain, soccer distracts us from our issues for some time. That is good for Germany. However that does not remedy the issues.
One of the crucial urgent points is competitiveness. Germany is slipping additional and additional behind on this respect. Can we nonetheless flip issues round?
I’ve to enter a little bit of element to reply this, so let me begin with the excellent news: Sure, we are able to do it. We have now all the pieces we have to overcome our challenges.
The unhealthy information is that we face many crises on the identical time. The ageing of society, the decline within the workforce, the local weather disaster and the ensuing mandatory restructuring of our trade. All of that is extraordinarily hectic. After which the lack of gasoline imports from Russia is making vitality provides costlier, and rising geopolitical tensions are affecting worldwide commerce. We’re way more depending on exports and imports than different nations. The brand new wars and geopolitical tensions additionally imply that we now have to make use of extra sources for protection.
How can it’s that every one these items are hitting us so exhausting suddenly?
Not all of it, however a lot of it was foreseeable. Germany’s decline is no surprise, particularly after we take a look at inhabitants traits. Over the previous twenty years, increasingly individuals have labored every year, which has enabled us to develop. Now this pattern is reversing: fewer individuals shall be working sooner or later, and tailwind is popping into headwind.
Right this moment we’d like a sensible mixture of presidency and personal motion.
Clemens Fuest
Financial coverage is characterised by lengthy cycles. Generally the state takes a again seat, such because the interval that started with Ronald Reagan and Margaret Thatcher and ended with Tony Blair and Gerhard Schröder. After which there are phases just like the Merkel years, that are characterised by a bigger state. Are we presently experiencing the top of such a cycle of statism – can we now want a brand new agenda coverage?
To start with, I share this analysis. We’re on the finish of such a cycle, which was really fairly lengthy at nearly 20 years. The mantra throughout Europe was: the state protects us, it shields us from the crises of the world. This was doomed to failure from the beginning, however now increasingly individuals in politics appear to be realizing this. However I do not anticipate the pendulum to swing utterly again to the Agenda period of the late Nineteen Nineties. And it should not.