German Finance Minister Christian Lindner addressed the need for structural reforms to improve the competitiveness of Germany’s economy on Monday. He emphasized that despite being considered healthy, the German economy is not in its best shape and is currently experiencing a downturn, similar to the British economy. Last year, Germany had the weakest economy among its large Eurozone peers due to high energy costs, weak global orders, and record-high interest rates. This led some economists to label Germany as “the sick man of Europe.”
Although Germany’s 0.9% expected economic growth remains below the 1.4% average for advanced economies in 2024, Lindner believes that structural reforms can help improve Germany’s position. He specifically mentioned reducing red tape, attracting workers into the labor market, and mobilizing private investment as areas that need improvement. The country was referred to as a “tired man” in need of reform during the World Economic Forum in January.
In addition to addressing structural reforms within Germany, Lindner also highlighted the importance of creating a single capital market for private investment in the European Union. He believes that this is a more viable solution than continually providing subsidies, as it is unlikely that any economy can sustain extensive subsidy payments. By implementing these changes, Germany can strengthen its competitiveness and maintain its position as a major player in Europe’s economy.