Berlin —
Germany needs both structural reforms and further investment in public infrastructure to overcome the recession, the International Monetary Fund’s head of Europe said in an interview with Süddeutsche Zeitung.
“You can’t have a productive economy without a functioning infrastructure,” Allred Comer told the paper in an interview published Tuesday.
Comer said it also makes sense to review current credit rules to mobilize more capital. “We at the IMF have already calculated this a long time ago. The debt brake can be eased, but government debt ratios will continue to fall.”
Finance Minister Christian Lindner insists Germany will stick to its debt brake, which limits budget deficits to 0.35% of gross domestic product, despite a second year of recession and low growth forecast.
Meanwhile, Economy Minister Robert Habeck recently proposed creating a multibillion-euro fund to stimulate investment and correct growth.
Asked whether Lindner or Habeck was right in the fundamental debate in the German government, Comer said: “A lot can be gained if politicians clearly communicate their medium- to long-term strategies.” answered.
This is especially true for climate-friendly country restructuring.
“Companies will only invest if they know what’s going to happen over the next 10 to 15 years,” Comer said.
