Germany’s finance chief call for investment
Germany’s finance minister, Olaf Scholz, said the state coffers could find €50 billion for extra spending in an economic crisis, putting a number on a possible fiscal stimulus for the first time.
Germany’s debt level is expected to fall to around 58 per cent of economic output this year from 60.9 per cent the previous year, putting it below the eurozone’s debt ceiling of 60 per cent and giving it more flexibility on future spending.
He said his ministry expected interest rates to remain very low for “the next few years” and that employers should seize the opportunity of near-zero borrowing costs to boost business investment.
The European Central Bank already signalled even more monetary stimulus for the eurozone economy, hoping to stop the slide towards an economic recession.
Scholz said: “I also believe that the time of higher interest rates can come up every now and then, but that will not happen in the next few years because of central bank policies.”
He said central banks globally were pursuing a loose monetary policy, including the European Central Bank.
“What I would wish for is more investments by the private sector,” Scholz said, in reference to higher investment in the US in projects or startups.
“My wish is that we also achieve such a cultural change,” the Merkel ally added.
The UK’s new populist prime minister, Boris Johnson, is expected to visit French Prime Minister Emmanuel Macron in Paris and Angela Merkel in Berlin this week in an apparent attempt to break the Brexit deadlock.
Johnson is also expected to speak to his Irish counterpart, Leo Varadkar, and the outgoing European Council president, Donald Tusk.
Tusk this year said there should be a “special place in hell” for Brexiters who lacked “a sketch of a plan” as to how to make it happen, in an apparent reference to Johnson.
The former journalist is expected to be given a “reality check” at next weekend’s Biarritz summit of the G7 as he tries to ask the EU to ditch the backstop for the border in Ireland.
A leaked German government document suggested Johnson’s insistence that Brexit would happen on October 31 with or without an agreement had failed to spark a rethink across Europe about the withdrawal agreement.
German technical expertise continues to grow. Picture credit: Eurasia Times