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THE LOCAL ZEITGEIST

EURO

‘Where’s the money?’

Following the Bundestag’s vote on Thursday to expand the eurozone bailout fund, The Local hit the streets to find out what the average German makes of it all, in the latest instalment of our new Zeitgeist series.

'Where's the money?'
Photo: DPA

Chancellor Angela Merkel’s conservative coalition was in apparent harmony with the opposition on Thursday (or at least most of it), as the Bundestag voted overwhelmingly to expand the European Financial Stability Facility, raising its scope to €440 billion ($599 billion). Only the socialist Left party, and a handful of government backbench rebels, voted against the measure.

Outside the machinery of government, however, opinion is much less unanimous. A survey commissioned by public broadcaster ZDF last week showed that three-quarters of Germans rejected the idea of throwing more money into saving the single European currency.

The Local ventured onto the streets of Berlin to ask people what they thought of their government’s decision.

Hannah Kowalski, 49, homemaker

“In my view, it’s crap when Germany gives others money. We are also poor. I am against this. Greece caused its own problems; it should take care of them. Where’s the money?”

Christoph Marx, 22, intern at public transport operator

“I think it’s actually good. This will strengthen Europe. We’re all in the same boat.”

Marianne Friedeißen, 57, unemployed

“I am against it. I’m from the GDR (former communist East Germany). I was not very excited about the so-called reunification. I personally think the whole idea of the European Union is not bad…but why should I, as a German citizen, help carry the debts of Greece, Ireland and Portugal?”

Matthias S., 24, student

“I don’t think that it will accomplish anything.”

Klaus B., 63, unemployed

“We never should have accepted Greece and Portugal (into the EU). You can’t compare these countries with Germany or France. It almost goes without saying. When this is over, they’ll just want more money.”

E. Wolf, 35, salesperson

“I have a very divided opinion. In general, I wasn’t really in favour of the euro. This is kind of a confirmation of the whole thing. Other countries have a completely different mentality and different way of handling money…But (the euro crisis) has affected even the middle class of Germans so that they can barely afford anything besides necessities.”

Interviews by Erin Huggins

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ECONOMY

Brexit and an aging population said to shade German economy

Germany's "wise men" council of economic experts on Wednesday sharply lowered its economic outlook as Europe's powerhouse battles headwinds from trade conflicts, Brexit uncertainty and an ageing population.

Brexit and an aging population said to shade German economy
A famous sculpture of the euro in Frankfurt am Main. Photo: DPA

The experts, who advise the government on economic policy, said they expected Germany's economy to grow by 1.6 percent this year and 1.5 in 2019.

That was well below their previous forecast of 2.3 percent and 1.8 percent respectively.

“The uncertain future of the global economic order and unavoidable demographic change represent major challenges to the German economy,” said chairman Christoph Schmidt in the council's latest annual report.

The so-called “wise men”, actually four men and one woman, urged Chancellor Angela Merkel's government to take action to prepare Germany for the threats ahead.

The warning comes as Germany braces for a period of political turbulence at home following Merkel's announcement that she will step down as head of her centre-right CDU in December and will not seek re-election as chancellor when her fourth term ends in 2021.

Brexit and baby-boomers

The German economy enjoyed stellar growth in 2017 underpinned by brisk domestic and international demand, record-low unemployment and low interest rates.

But Europe's top economy has hit a soft patch this year against a backdrop of slower global growth. The German economy ministry last month lowered its growth estimates and is now pencilling in expansion of 1.8 percent this year and the next.

Clouding the outlook is concern about US President Donald Trump's aggressive “America First” trade agenda which has seen him lock horns with China and the European Union, unsettling Germany's export-reliant companies.

Other outside risks stem from an increased chance of a no-deal Brexit when Britain quits the bloc in March, which could badly disrupt trade, and rising euroscepticism in countries like Italy, the “wise men” said.

“An escalation of the trade conflict, a disorderly Brexit, or a resurgence of the euro area crisis harbour risks for economic development,” they warned.

They urged Germany and the European Union to forcefully reject protectionism and stand up for free trade.

Domestically, the experts singled out Germany's ageing workforce as a “major challenge”.

German companies are already grappling with a shortage of skilled workers as the baby-boomer generation retires, and the problem is expected to worsen in the years ahead.

To get more people into the workforce, especially women, the experts urged Berlin to encourage flexible working hours and improve childcare options.

Immigrants could likewise help plug the gap, they added, while also advocating a gradual rise in retirement age.

The experts pressed Berlin to make greater strides in preparing Germany for the digital economy, urging investments to improve the country's creaking internet infrastructure.

Berlin should also do more to support tech start-ups and modernize its education system to prepare youngsters for the “digital transformation”, they added.

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