{"id":2911,"date":"2024-10-31T08:57:53","date_gmt":"2024-10-31T08:57:53","guid":{"rendered":"http:\/\/forefrontnews.cn\/?p=2911"},"modified":"2024-10-31T08:57:53","modified_gmt":"2024-10-31T08:57:53","slug":"germanys-economy-is-stagnant-but-its-quarrelsome-government-cant-agree-on-a-way-forward","status":"publish","type":"post","link":"http:\/\/forefrontnews.cn\/?p=2911","title":{"rendered":"Germany\u2019s economy is stagnant. But its quarrelsome government can\u2019t agree on a way forward"},"content":{"rendered":"

\"\"\"ab4fda7d6b75b716f6510dc4ff58c92f\"<\/p>\n

Germany\u2019s economy is struggling and the governing coalition has a lot of ideas on how to fix it. But it can\u2019t agree which the right one is.<\/p>\n

The latest outbreak of infighting in Chancellor Olaf Scholz\u2019s government has raised questions about whether it will get anything done in the 11 months before Germany\u2019s\u00a0next election<\/a><\/span>\u00a0is due \u2014 and whether it will survive until then.<\/p>\n

There\u2019s agreement that the state of the German economy, Europe\u2019s biggest, demands action. It is\u00a0expected to shrink<\/a><\/span>\u00a0in 2024 for the second year in a row, or at best stagnate, battered by external shocks and home-grown problems including red tape and a shortage of skilled labor.<\/p>\n

But there\u2019s no unity on the solution. As Finance Minister Christian Lindner put it last week: \u201cThere\u2019s no shortage of ideas. What there is a shortage of at present is agreement in the governing coalition.\u201d<\/p>\n

On Wednesday, official figures showed unexpected economic growth of 0.2% in the third quarter compared with the previous three-month period, but economists say the broader picture is that Germany is still mired in stagnation.<\/p>\n

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Lindner himself has been a central player in the cacophony, adding to a long list of publicly aired disagreements that have helped make the nearly three-year-old government very unpopular.<\/p>\n

Scholz\u2019s center-left Social Democrats, Vice Chancellor Robert Habeck\u2019s environmentalist, left-leaning Greens and Lindner\u2019s pro-business Free Democrats \u2014 a party that in recent decades has mostly allied with conservatives \u2014 set out in 2021 to form an ambitious, progressive coalition straddling ideological divisions that would modernize Germany.<\/p>\n

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The government can point to achievements: preventing an energy crunch after Russia\u00a0cut off its gas supplies<\/a><\/span>\u00a0to Germany, initiating the\u00a0modernization of the military<\/a><\/span> and a series of social reforms. But the impression it has left with many Germans is of deepening dysfunction.<\/p>\n

\u201cEach party is going its own way \u2014 you get the impression they\u2019re already in election campaign mode,\u201d Clemens Fuest, the head of the Ifo economic think-tank, told ZDF television. \u201cIf that\u2019s the case, if the chancellor can\u2019t manage to get the government to pull together, then they should actually end the coalition.\u201d<\/p>\n

Deep economic divisions<\/h2>\n

Last week, Habeck proposed a state investment fund to help companies of every size. It was promptly rejected by both Lindner and Scholz. Lindner\u2019s party organized a meeting with leaders of business associations for Tuesday, the same day that Scholz had already arranged a closed-door meeting of his own with industry and union leaders.<\/p>\n

Scholz said that \u201cwe must get away from theater stages; we must get away from something being presented and proposed that then isn\u2019t accepted by everyone.\u201d Still, his coalition partners weren\u2019t invited to his own meeting with industry leaders.<\/p>\n

The divisions are particularly deep on economic and financial issues. Politicians on the left want to see massive state investment and reject talk of cutting welfare programs. Lindner\u2019s Free Democrats categorically reject any tax increases or changes to Germany\u2019s strict self-imposed limits on running up debt, and say it\u2019s time to save money \u2014 for example, on benefits for the long-term unemployed.<\/p>\n

The collision of philosophies has complicated putting together the national budget since Germany\u2019s highest court last November annulled\u00a0a government maneuver<\/a><\/span>\u00a0to repurpose 60 billion euros ($64.8 billion) originally meant to cushion the impact of the COVID-19 pandemic for measures to help combat climate change and modernize the country.<\/p>\n

That forced the coalition into a hasty rehash of the 2024 budget, including\u00a0subsidy cuts<\/a><\/span>\u00a0that prompted\u00a0protests by farmers<\/a><\/span>.<\/p>\n

The 2025 budget only intensified the friction, which continued unabated through campaigns for\u00a0European<\/a><\/span>\u00a0and state elections in which the governing parties\u00a0were punished<\/a><\/span>.<\/p>\n

Scholz, Lindner and Habeck\u00a0presented an agreement<\/a><\/span>\u00a0in July on a budget that includes higher spending on defense and affordable housing, along with a stimulus package. But it got bogged down in another internal dispute, and the coalition leaders took more than a month to emerge with\u00a0a second deal<\/a><\/span> tweaking details.<\/p>\n

That budget has yet to go through parliament. Lawmakers need to iron out the final draft by Nov. 14, and the recent skirmishes inside the coalition have some wondering whether the government will survive beyond that.<\/p>\n

\u201cThis government is to all intents and purposes no longer capable of acting,\u201d opposition leader\u00a0Friedrich Merz<\/a><\/span>\u00a0told ARD television on Sunday. \u201cIt is at an end.\u201d<\/p>\n

On the face of it, there\u2019s little incentive for the governing parties to risk facing voters earlier than next September. Merz\u2019s center-right Union bloc leads national polls, the far-right\u00a0Alternative for Germany<\/a><\/span> is performing strongly, all three governing parties are weak and the Free Democrats are around or below the 5% of the vote needed to keep any seats in parliament. But there\u2019s also little sign of improvement.<\/p>\n

The government\u2019s own statements have fed questions over its future. In early October, Lindner said that \u201cstability is of paramount importance for Germany.\u201d<\/p>\n

\u201cBut at some point, a government can itself become part of the problem,\u201d he told news portal Table.Briefings. \u201cA government must always ask itself whether it meets the demands of the time.\u201d<\/p>\n

<\/div>\n

Scholz has urged his partners to stick together until the end of their term, saying last week that \u201canyone who has a mandate must fulfill that mandate.\u201d<\/p>\n

\u201cNo one should just slink away,\u201d he said in an interview with ZDF. \u201cThat\u2019s not my style, at least.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Germany\u2019s economy is struggling and the governing coalition has a lot of ideas on how to fix it. But it can\u2019t agree which the right one is. The latest outbreak… <\/p>\n","protected":false},"author":1,"featured_media":2913,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[263,260],"tags":[937,363],"views":370,"_links":{"self":[{"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=\/wp\/v2\/posts\/2911"}],"collection":[{"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2911"}],"version-history":[{"count":1,"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=\/wp\/v2\/posts\/2911\/revisions"}],"predecessor-version":[{"id":2914,"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=\/wp\/v2\/posts\/2911\/revisions\/2914"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=\/wp\/v2\/media\/2913"}],"wp:attachment":[{"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2911"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/forefrontnews.cn\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}