"Germany has bolstered its planning aspects"
Germany's economic situation continues to be a substantial concern, according to economist Gunter Schnabl. He advocates for a return to market economy principles as a means to address the crisis, drawing parallels between Germany's issues and those faced by former U.S. President Donald Trump.
In an interview with ntv.de, Schnabl discussed the urgent need for politicians to create suitable economic framework conditions and the importance of acknowledging the crisis's causes. He singled out the erosion of market economy principles since the millennium as a leading reason for Germany's economic struggles.
Regarding these principles, Schnabl pointed out several areas of violation: monetary instability, excessive price controls, intervention in company competition, and the weakening of liability. He claimed that these issues have contributed to a gradual shift towards a planned economy, which has in turn slowed growth and destabilized the economy.
Schnabl argued that the current crisis was not solely the result of external shocks like the coronavirus pandemic or the Ukraine war. Instead, he placed significant blame on the German government's policies, asserting that the economic situation would have been better had market economy principles been upheld.
In light of the current election campaign, Schnabl suggested that a return to market economy principles would involve reducing government spending, freeing the economy from excessive regulations, and eliminating subsidies for companies. He expressed support for parties committed to a leaner state, but cautioned that this approach may initially worsen the economic crisis before long-term improvements are realized.
In his view, policies like those implemented by Donald Trump during his presidency could serve as examples. Trump criticized rising prices and protected manufacturing jobs through tariffs, ultimately securing the support of disgruntled voters. However, Schnabl acknowledged the potential for these policies to fuel inflation, emphasizing the need for careful implementation.
While acknowledging that Germany is not a pure market economy, Schnabl claimed that planned economy elements have been systematically strengthened since the millennium. He encouraged politically bold measures, as demonstrated in Argentina's recent economic reforms, to drive long-term growth and improve Germany's economic situation.
In the interview, Schnabl emphasized the need for Germany to revisit its monetary policy, citing monetary instability as one of the violations of market economy principles that have contributed to the country's economic struggles. Furthermore, he suggested that adopting policies similar to those implemented by former U.S. President Trump, such as protecting manufacturing jobs and criticizing rising prices, could provide some solutions, but urged careful implementation to avoid fueling inflation.
