The federal government wants to get the economy going again with various measures. However, DIW boss Fratzscher does not see the big hit – nevertheless there is reason for confidence.
Deindustrialization, standstill, wave of bankruptcies – the list of terms intended to describe Germany’s economic situation is long. For Marcel Fratzscher, President of the German Institute for Economic Research Berlin (DIW), however, they do not apply.
In the Interview with the ARD Capital Studio he criticizes that the Germans speak too badly of themselves: “I think a lot of things are going well. I think we’re more of a mental depression at the moment.” The structure of the German economy is healthy, but in a bad phase. “I believe that if we manage to do this – and not wait another ten years until we make the necessary reforms, as we did when Germany was the sick man of Europe – we will find an excellent solution to these challenges,” Fratzscher encourages.
“That gives me no hope”
However: With regard to the work of the federal government, the economic researcher is rather skeptical: “I would never give up hope, but you can see that these three traffic light parties are often too far apart.” This was clear, for example, in the case of basic child security. You can see “that there are two parties living on completely different planets and that doesn’t give me any hope,” says Fratzscher.
The Green Family Minister Lisa Paus had originally asked for seven to twelve billion euros for this – she agreed with Finance Minister Christian Lindner from the FDP on only 2.4 billion.
Marcel Fratzscher is a professor at the Humboldt University in Berlin and heads the German Institute for Economic Research (DIW) in Berlin.
Fratzscher considers the debt brake, which the finance minister absolutely wants to comply with, to be a mistake: “Every entrepreneur knows: If I have big challenges, want to use new technologies, want to develop new products, then I first have to take out a loan and fault.” That also applies to the state. Fratzscher’s demand therefore: spend more money to improve education, carry out the ecological transformation and bring the digital infrastructure into shape.
The decisions from Meseberg go in the right direction for Fratzscher, but they are not a “big hit”.
“The government lacks a long-term strategy”
Fratzscher also criticizes the fact that the federal government is creating uncertainty with its communication – and that is precisely what is damaging to the economy. “It’s about trust, it’s about confidence. And if you, as entrepreneurs, are not firmly convinced that the future prospects are good, that you have a stable environment, that you have reliable policies, that people and others are consuming Companies invest, then they will not make any investments themselves today.”
The German government is also doing a lot of things right, says the DIW boss: “18 months ago nobody would have thought that war would come and she reacted quickly and well. There have been many successes, but the German government lacks a clear long-term strategy and a certain unity.”
He accuses the three traffic light parties of contributing to people’s “mental depression” with their communication and the open dispute: “If there is no trust among people, among companies, then an economic weak phase solidifies, then becomes one Permanent crisis, goes into a vicious circle and it becomes more and more difficult to get out.”
Fratzscher: industrial electricity price would be mistake
It is questionable whether the traffic light coalition can show this cohesion in the future. Shortly after the cabinet meeting in Meseberg, new points of contention arose. The FDP wants to reverse the nuclear phase-out – to the surprise of Environment Minister Steffi Lemke. And the idea of a lower industrial electricity price from Economics Minister Robert Habeck has not yet been decided either.
The FDP rejects the idea, like DIW boss Fratzscher, who considers the industrial electricity price to be a mistake: “It means significantly higher electricity costs for everyone who does not receive it. The companies, almost 2,000 of whom benefit from it, employ two million people. It’s certainly helpful for 2 million workers and their company. It’s really bad for 43 million workers because their companies have to pay more – and that includes a lot of small businesses, which are also struggling right now.”