The European head of the International Monetary Fund stated in an interview with Sueddeutsche Zeitung that Germany needs structural reforms and increased public infrastructure investment to overcome its current recession.
To mobilize more funds, Alred Kammer suggested adjusting credit regulations, mentioning that the IMF had previously calculated that Germany’s debt brake could be relaxed without causing an increase in the debt-to-GDP ratio.
Finance Minister Christian Lindner remains firm on adhering to the debt brake, which limits the budget deficit to 0.35% of GDP, despite a projected second consecutive year of recession and weak growth. Meanwhile, Economy Minister Robert Habeck has recently suggested a multibillion-euro fund to boost investment and address sluggish economic performance.
When asked about the ongoing policy debate between Lindner and Habeck, Kammer commented that it would be beneficial for politicians to communicate a clear medium- and long-term strategy, especially in regard to climate-friendly economic transformation, as “companies will only invest if they know what is going to happen in the next ten to 15 years.”
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