Germany’s economy is in bad shape, says finance minister

Germany: The ‘Unfit Man’ in Need of Structural Reforms to Boost Economy

German Finance Minister Christian Lindner recently spoke at the London School of Economics and addressed the state of the German economy. While some have referred to Germany as “the sick man of Europe,” Lindner rejected this notion, stating that it was an “unfit man” in need of structural reforms to improve its competitiveness.

Despite being Europe’s largest economy, Germany underperformed its large euro zone peers in the previous year. Factors such as high energy costs, lackluster global orders, and record-high interest rates contributed to this economic downturn. The International Monetary Fund (IMF) predicted that German economic growth would fall well below the average for advanced economies in 2024, with a projected growth rate of 0.9%. This is significantly lower than the 1.4% average of its peers.

Lindner believes that Germany needs structural reforms to boost its economy and regain competitiveness. These reforms include reducing red tape, encouraging increased labor market participation, and mobilizing private investment within the country. In addition, Lindner advocated for the development of a single capital market for private investment across the EU instead of relying on subsidies. This, he believes, would provide greater economic stability compared to extended subsidy payments.

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