'Tired' German economy needs reforms, says finance minister
Germany has not become the sick man of Europe but a tired one that needs structural reforms, Finance Minister Christian Lindner said Friday as he sought to assuage fears of a prolonged downturn in the eurozone's largest economy.
German output contracted in 2023 by 0.3 percent year-on-year according to official preliminary figures released Monday.
Its economic woes have sparked a debate whether Germany was once again the "sick man of Europe", a label from the late 1990s when the country grappled with the costly fallout of reunification.
READ ALSO: Why is Germany stuck in recession - and how long might it last?
"I know what some of you are thinking. 'Germany probably is a sick man'," Lindner told a panel at the World Economic Forum in Davos.
"Germany is not the sick man... Germany is a tired man after a short night and the low growth expectations are partly a wakeup call. And now we have a good cup of coffee, which means structural reforms," he said.
The German economy's performance last year was significantly worse than the average 0.6 percent growth in 2023, according to the latest forecasts by the European Commission.
Its economy lagged behind fellow eurozone members France, Spain and Italy as well as the United States and Britain.
Lindner blamed the energy crisis caused by Russia's invasion of Ukraine, but said the German economy has shown "resilience" and that a modest recovery is expected in 2024.
The German government forecasts growth of 1.3 percent this year while the International Monetary Fund (IMF) expects the German economy to grow by 0.9 percent in 2024.
In addition to current economic headwinds, Germany is facing major structural challenges including a shortage of skilled workers as the population ages, a costly transition towards green energy and years of under-investment in infrastructure.
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German output contracted in 2023 by 0.3 percent year-on-year according to official preliminary figures released Monday.
Its economic woes have sparked a debate whether Germany was once again the "sick man of Europe", a label from the late 1990s when the country grappled with the costly fallout of reunification.
READ ALSO: Why is Germany stuck in recession - and how long might it last?
"I know what some of you are thinking. 'Germany probably is a sick man'," Lindner told a panel at the World Economic Forum in Davos.
"Germany is not the sick man... Germany is a tired man after a short night and the low growth expectations are partly a wakeup call. And now we have a good cup of coffee, which means structural reforms," he said.
The German economy's performance last year was significantly worse than the average 0.6 percent growth in 2023, according to the latest forecasts by the European Commission.
Its economy lagged behind fellow eurozone members France, Spain and Italy as well as the United States and Britain.
Lindner blamed the energy crisis caused by Russia's invasion of Ukraine, but said the German economy has shown "resilience" and that a modest recovery is expected in 2024.
The German government forecasts growth of 1.3 percent this year while the International Monetary Fund (IMF) expects the German economy to grow by 0.9 percent in 2024.
In addition to current economic headwinds, Germany is facing major structural challenges including a shortage of skilled workers as the population ages, a costly transition towards green energy and years of under-investment in infrastructure.
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