Olaf Scholz, Germany’s
Finance Minister decided that taking more debt would not be the best method for
helping Germany’s economy as it continues to slow. Scholz believes that Germany
already has too much debt and he does not want to increase public debt, as
well. He also believes that
it is due to Brexit and other trade disagreements. Structural issues like weak
investment were not stated as the problem, but Brexit, and the US trade discussions
with the EU and China were viewed as potential factors. He believes that in
order to be a globalized economy, it is expected to be affected by other countries
in the world, and as the world economy slows, it is only natural Germany’s does
as well. Mr. Scholz also thinks that despite the slow growth, Germany will not
fall into recession, saying that they “just have softer growth, which is far away
from a recession.” The article stated that in order to help the economy Scholz agreed
to more investments in different sectors, increased spending on pensions and
social welfare, and he approved tax relief for families totaling 11 billion dollars
a year. This article shows the effects of living in a connected and globalized
world. Brexit is still a huge decision from which many nations are feeling its
rippling effects, along with issues from the US’s trade negotiations with China
and the EU.
1 comment:
I think it is fiscally responsible for the German government to want to keep debt under control. Given the softness in the German economy they might have to begin to try to stimulate the economy. I don't think they need to yet, but if it continues to worse they will need to spend to help stimulate the economy.
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