At a recent event at the London School of Economics, German Finance Minister Christian Lindner made it clear that Germany is not the sick man of Europe, but rather an unfit man in need of structural reforms. Despite having the largest economy in Europe last year, Germany’s economic growth was the weakest among its euro zone peers due to high energy costs, weak global orders, and record-high interest rates.
According to forecasts by the International Monetary Fund, German economic growth is expected to remain at 0.9% in 2024, which is well below the average of 1.4% for advanced economies. While Lindner acknowledged that the German economy is healthy overall, he stressed that it is not in the best shape and is currently experiencing a downturn.
To address these challenges, Lindner outlined several key areas where Germany needs to make reforms. These include reducing red tape, attracting workers into the labor market, and mobilizing private investment. He also emphasized the need for a single capital market for private investment in the EU, rather than relying on subsidies. By implementing these changes, Lindner believes that Germany can overcome its current challenges and set itself up for long-term success.