“I also say it self -critically – this task is greater than one or the other could imagine a year ago,” said Friedrich Merz in a Saturday speech in the North German city of Osnabruck. “We are not only during the economic weakness, but in the structural crisis of our economy“.
As Bloomberg emphasizes, the industrial power and the largest exporter in Europe are struggling with the persistent high energy costs as a result of Russia's invasion of Ukraine and turmoil related to American customs. The data published on Friday showed that the German economy shrunk in the second quarter by more than initially estimated.
“At the latest this week, no one should have illusions about how deep and far -reaching challenges are facing us,” Merz told members of the Christian -Democratic Union (CDU) to the members of his party during a rally in Lower Saxony, the home Land of the car manufacturer Volkswagen AG.
The German chancellor pointed to 36 % decrease in Volkswagen profits After taxing in the second quarter as “one of many messages”. “Large parts of our economy are no longer really competitive and it is a matter of price competitiveness,” said Merz, not exchanging specific companies. “Quality is still good, and company leaders see these challenges. The basic conditions in Germany were simply not good enough for the last decade.”
Chancellor's reforms
As the Bloomberg agency reminds, since the office was taken this year, Merz promised extensive reforms aimed at limiting bureaucracy, the modernization of infrastructure and stimulating national demand. His government is planning hundreds of billions of euros for investments in roads, bridges and armed forces to increase productivity.
On Saturday, the German chancellor reminded about new tax incentives for investors and repeated his opposition to raising taxes for medium -sized enterprises.
He also admitted that the 15 % duties imposed by the US to German exports would be a burden on the economy, although he stipulated that the open trade war with Washington could be much worse.
