According to Federal Finance Minister Jörg Kukies (SPD), Germany urgently needs to address its structural problems in order to get back on a growth path.
By Andrea Thomas
DOW JONES–Kukies said in an interview with the American television station CNBC that the International Monetary Fund’s economic forecast for Germany had just been revised downwards.
“The structural weaknesses of our economy must definitely be addressed,” he said in an interview with the English-language broadcaster. “It’s really important that we embark on a path of economic growth.”
The German economy has shrunk in the past two years and economists are not expecting an upswing this year. Kukies emphasized that Germany must create better investment conditions and ensure research and development.
In a panel discussion at the World Economic Forum in Davos on the topic of “Europe: Finding the Money”, Kukies also advocated for a targeted reform of the debt brake anchored in the German Basic Law. This is necessary because Germany has a high need for investment in infrastructure projects. He also mentioned the estimated costs of over 700 billion euros for converting the energy system. “The majority of investments will come from the private sector,” Kukies said.
In the discussion he also emphasized that Europe already has common financing instruments. Kukies spoke out against common European debt in the form of Eurobonds in order to finance defense spending. This was “not a good idea,” said Kukies in the English-language discussion. You first have to talk about the goals of what exactly should be financed before talking about the financing channels.
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(END) Dow Jones Newswires
January 23, 2025 04:11 ET (09:11 GMT)