Latest news with #VeronikaGrimm
New Straits Times
6 days ago
- Business
- New Straits Times
Germany's economy at risk, expert warns, as Merz nears 100 days
BERLIN: Just under 100 days after taking office, Germany's new conservative-led coalition government faces a sobering assessment from leading economic expert Veronika Grimm, reported German news agency dpa. While the economy shows some signs of hope and key sentiment indicators have improved slightly, Grimm told the Funke media group that "the government has yet to deliver." Chancellor Friedrich Merz's governing coalition will mark its first 100 days in office next Wednesday. He came to office on promises to kick-start Europe's biggest economy after two years of contraction. Grimm is a member of the five-person Council of Economic Experts, which evaluates the economic policies of the government and offers its advice. They are appointed by the German president. Grimm criticised the coalition for distributing financial handouts - such as pension increases, subsidies on diesel fuel for farmers, and relief for hospitality businesses - without a clear long-term plan. "Germany must at last do its homework and tackle thoroughgoing reform," Grimm said in the remarks published on Saturday. "So many electoral gifts are being distributed that huge budgetary holes are opening up – and this before a discussion on tax rises," she said. Grimm called for business taxes to be reduced and red tape cut – "from the conditions on the labour and housing markets through rules on climate and up to data protection." "German business is being held back by a veritable thicket of regulation," Grimm concluded.
Fibre2Fashion
23-05-2025
- Business
- Fibre2Fashion
German economy to see nil growth in 2025, 1% growth in 2026: GCEE
The German economy, which is still in a phase of 'pronounced weakness', is expected to stagnate this year and grow by only 1 per cent in 2026, according to the German Council of Economic Experts, an independent academic body that advises on economic policy issues. Bureaucratic requirements and long approval procedures are slowing down overall economic growth. Germany's economy, in 'pronounced weakness', is expected to stagnate this year and grow by 1 per cent in 2026, the German Council of Economic Experts said. Bureaucratic needs and long approval procedures are slowing down growth. Average CPI inflation is likely to be 2.1 per cent in 2025 and fall to 2 per cent in 2026. US trade policy places an additional burden on the already weak German exports. If funds from the recently-announced fiscal package are spent on additional investment, this will modernise the country's infrastructure and increase growth in the medium term, it noted. Debt-financing public consumption should be avoided, and institutional precautions should be taken to ensure investment-orientated use of the funds, it cautioned in its Spring Report 2025. Unnecessary bureaucracy should be reduced more consistently than in the past in order to relieve the burden on companies. 'In the near future, the German economy will be significantly influenced by two factors: US trade policy and the fiscal package,' explained GCEE chair Monika Schnitzer. 'US trade policy places an additional burden on the already weak German exports. With a sharp and unpredictable rise in tariffs, German exports are likely to decline even further,' she noted. Consumer price inflation is expected to be 2.1 per cent on an average in 2025 and fall slightly to 2 per cent in 2026. 'Although markets anticipate interest rate cuts, the inflation outlook remains highly uncertain. For instance, it is unclear whether ongoing trade conflicts will fuel or dampen inflation. In addition, expansionary fiscal policies in Germany could raise inflation expectations, potentially prompting the ECB to favour a more restrictive monetary policy stance,' explained Veronika Grimm, council member . Fibre2Fashion News Desk (DS)
