Germany facing MAJOR RECESSION: Stark WARNING issued to Merkel as Berlin set for ‘crisis’
GERMANY should prepare to deal with a financial crisis should the economic structure of Europe’s most powerful country start to crumble, according to EU Budget Commissioner Günther Oettinger.
By LEVI WINCHESTER
Express.co.uk
Thu, Jan 10, 2019
The nation which has the largest economy in Europe has been hit by a raft of weak economic data over recent months, sparking concerns of a financial cooldown and a new negative trend. Fears of a recession being on the cards have even begun to emerge, with analysts suggesting the latest disappointing production data had increased the risk of a technical recession after a 0.2 percent contraction in the third quarter. A recession is defined by economists as gross domestic product (GDP) falling for two consecutive quarters. The brakes have seemingly been slammed on a nine-year expansion in Europe’s economic powerhouse as an ongoing trade war between the United States and China and Brexit uncertainty continue to rattle global markets.
Mr Oettinger, a former Prime Minister of Baden-Württemberg, urged the Federal Government to prepare the country to deal with the eventuality of a financial crisis should the downward trend continue.
The EU Budget Commissioner has called on the government to reduce taxes as soon as possible in the event that the economic downturn worsens.
Finance Minister Olaf Scholz said officials are working on plans including tax cuts as part of an effort to work through Berlin’s financial woes.
But Mr Oettinger said the Federal Government must still be braced to react quickly if necessary should the gloomy financial data from Germany fail to improve.
He told German television station WELT: “The tax burden in Germany is quite high in international comparison, especially in corporate taxation.
“We will have to wait and see how the tax reform will work in the US in the long run.
“But right now it provides a strong incentive to invest there.
“This is another reason why it would be good if the grand coalition implemented a structural reduction in income and corporation tax during this legislative period.
“Incidentally, the Federal Government is well advised to prepare for a crisis in order to react quickly if necessary. I think that makes sense and is necessary.”
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