Germany Economics Minister Habeck
“We’re not sick, but a bit undertrained”
Status: 10.08.2023 | Reading time: 2 minutes
Robert Habeck (Greens) Federal Minister of Economics wants, among other things, to “remove barriers to investment” for the German economy
Source: dpa/Marcus Brandt
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The German economy is weakening. But Robert Habeck (Greens) remains optimistic. The Federal Minister of Economics wants to “eliminate” the “political sloppiness” of the past few years. Germany must work hard on its competitiveness.
Federal Minister of Economics Robert Habeck does not see the state of the German economy as too gloomy, despite the current economic downturn. “We’re not sick, but a bit undertrained,” said the Green politician to the weekly newspaper.Time“. Most recently, Germany was again considered the sick man of Europe because of the worse economic situation than in other countries. Habeck justified the situation by saying that Germany is an export nation. “Exports have made us rich, and the economy has grown very strongly as a result,” explained the minister. “But if the global economy, for example in China, weakens, it will hit Germany harder.”
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In addition, it was only a year ago “that we lost about half of the gas – other countries did not have such a dependency on Russia”. Furthermore, domestic demand is weaker due to high inflation. Inflation means that people have less money, the high interest rate means that investments become more expensive and less is invested. This can be seen, for example, in the weakening of residential construction. “That sounds bitter and cynical, but the goal of central banks is to dampen investment so as not to further increase inflation.”
Central banks such as the European Central Bank (ECB) have massively increased interest rates in the fight against high inflation. Germany’s economy shrank in late 2022 and early 2023 and only stagnated in the spring. Many experts also expect a decline in gross domestic product for the current year as a whole.
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Germany must work hard on its competitiveness, admitted Habeck. “We have to remove barriers to investment, reduce bureaucracy and streamline the countless reporting requirements,” said the minister. “There was a political sloppiness, and it must now be eliminated.”
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According to many companies, Germany as a business location has developed negatively in the past two years. A good quarter is considering relocating their production, according to a survey by the market research institute Kantar Public among 150 German companies. The majority of companies (61 percent) consider Germany to be “less attractive” (46 percent) or “not attractive” (15 percent) as a business location. The average grade of the manufacturing companies for the industrial location is therefore “three minus” (3.3).
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