Chancellor Olaf Scholz has pledged to encourage investment and attract skilled workers to revive Germany’s sluggish economic growth. In the face of challenges posed by inflation, high interest rates and geopolitical tensions, Scholz highlighted the vicious cycle created when bad economic data causes worsening sentiment, which in turn worsens the recession.
Speaking today at a meeting with employers’ association BDA, Mr Scholz stressed the need to re-expand the economy, reduce bureaucratic hurdles, provide investment incentives and provide affordable and sustainable energy supplies. He detailed a planned growth initiative aimed at ensuring that
The Prime Minister emphasized the importance of integrating more qualified workers into the labor market, including those from overseas, and advocated greater flexibility in working hours and adjustment of retirement ages.
The announcement follows the Ministry of Economy’s recent revision of its economic outlook earlier this month, which now expects a contraction of 0.2% this year, a change from the previous forecast of 0.3% growth. This leaves Germany behind other countries in the Group of Seven.
Scholz also noted that as a result of Russia’s large-scale invasion of Ukraine, the country has moved away from its historically dependent reliance on low-cost Russian energy for its energy supplies. Germany is currently exploring alternative energy.
Similarly, the Chancellor expressed his intention to strengthen Germany’s position as a financial center and stressed the importance of the European Commission finalizing the Capital Markets Union.
Regarding the European Union, Scholz recognized the need for uniform regulation within the internal market, but called on Brussels to significantly reduce bureaucracy. He noted that certain sustainability conditions set by the European Commission have led to excessive bureaucracy, which needs to be addressed urgently.
Reuters contributed to this article.
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