Annual economic report in the Bundestag: optimism or whitewashing?

No recession is expected for this year. A political success, says Economics Minister Habeck in his government statement on the economic report in the Bundestag. Opposition and FDP warn: The German location is becoming unattractive.

Is it going well? Is it bad? Economics Minister Robert Habeck was optimistic in his government statement on the annual economic report in the Bundestag. The differences in the debate between government and opposition already become clear in the analysis of the economic development: Sandra Detzer from the Greens and Bernd Westphal from the SPD primarily see the positive sides of the development.

The German economy grew by 1.9 percent in 2022. For Detzer, this is “actually a small sensation – in the middle of the energy crisis, at the end of a pandemic and in times of disrupted supply chains”. And on top of that, the forecasts for this year are also positive, although we have not yet overcome the crises, says Westphal.

Habeck: Upward trend

The federal government is currently expecting growth of 0.2 percent. Economics Minister Robert Habeck speaks of an upward trend. This is strongly related to the stabilization on the energy market.

And – that’s how self-confident the minister is – with his own politics. “There is hardly any other justification for this than the business community’s confidence in the country’s ability to act politically,” said the minister.

Criticism of Habeck: “You don’t have a sensible plan”

It sounds very different with the opposition parties. “Mr. Habeck, that was very nice poetry again, but unfortunately there was also a lot of whitewashing,” criticized Amira Mohamed Ali, leader of the Left Party. “The situation is much more serious than you make it out to be and unfortunately you don’t have a sensible plan.”

Union parliamentary group leader Jens Spahn also came to this conclusion, referring above all to the further increase in prices. The CDU politician warns that inflation will remain noticeably high. A long-lasting phase of low growth is imminent. “Therefore, this government would have to commit to a growth policy without any ifs or buts.”

1.5 degree target as an economic opportunity

Habeck is convinced that growth should result from the conversion of the economy to climate neutrality. The obligation to meet the 1.5 degree target also includes an economic opportunity – and will lead to a renewal of prosperity, according to the title of this year’s annual economic report.

This should be made possible by new forms of production and by reducing CO2 emissions when creating new value chains, explained Habeck. In this context, he announced further laws to accelerate the expansion of wind and solar energy. Bureaucratic obstacles are to be removed, for example the installation of small solar systems on balconies or on building walls is to be made easier.

AfD and Union criticize focus on climate protection

However, the focus on climate protection has been criticized by both the Union and the AfD. The industrial backbone of Germany is in a dramatic state, says AfD parliamentary group leader Leif Erik Holm. “Big corporations are on the move: BASF, Bayer, BioNTech, our country’s de-industrialization is underway, and I don’t feel any panic in this room at all, it seems like it’s just being accepted.”

But the FDP is also concerned about the location, especially against the background of massive subsidy programs like in the USA. “The poker for the locations is in full swing,” said the economic policy spokesman for the FDP, Reinhard Houben. “And some at the table play with marked cards, so it’s all the more important that we don’t settle for the status quo.”

He calls for more efforts from his own traffic light government, including reducing bureaucracy. There is then applause from the CDU and CSU from the opposition.