lindner1_JOHN MACDOUGALLAFP via Getty Images_germanfinanceministry John Macdougall/AFP via Getty Images

A New Fiscal Strategy for Germany

The German economy must contend with not only the shocks of COVID-19 and Russia’s war on Ukraine but also several major medium- and long-term challenges. Against this backdrop, the country needs a fiscal policy that boosts sustainable growth through supply-side measures without further stoking inflation.

BERLIN – The extraordinary shock of the ongoing COVID-19 pandemic and the impact of Russia’s war of aggression against Ukraine are reverberating throughout the German economy. Sharp increases in the prices of energy and raw materials, as well as continued and new disruptions to global supply chains, are postponing economic recovery. Consumer and producer prices are rising at their fastest rate in a half-century, while forecasts for GDP growth are being revised downward.