Sunday, November 10, 2024

Germany’s economy isn’t growing. But its quarrelsome government can’t agree on a way forward

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BERLIN (AP) — Germany’s economy isn’t growing and the governing coalition has a lot of ideas on how to fix it. But it can’t agree which the right one is.

The latest outbreak of infighting in Chancellor Olaf Scholz’s government has raised questions about whether it will get anything done in the 11 months before Germany’s next election is due — and whether it will survive until then.

There’s agreement that the state of the German economy, Europe’s biggest, demands action. It is expected to shrink in 2024 for the second year in a row, or at best stagnate, battered by external shocks and home-grown problems including red tape and a shortage of skilled labor.

But there’s no unity on the solution. As Finance Minister Christian Lindner put it last week: “There’s no shortage of ideas. What there is a shortage of at present is agreement in the governing coalition.”

A coalition of rivals

Lindner himself has been a central player in the cacophony, adding to a long list of publicly aired disagreements that have helped make the nearly three-year-old government very unpopular.

Scholz’s center-left Social Democrats, Vice Chancellor Robert Habeck’s environmentalist, left-leaning Greens and Lindner’s pro-business Free Democrats — a party that in recent decades has mostly allied with conservatives — set out in 2021 to form an ambitious, progressive coalition straddling ideological divisions that would modernize Germany.

The government can point to achievements: preventing an energy crunch after Russia cut off its gas supplies to Germany, initiating the modernization of the military and a series of social reforms. But the impression it has left with many Germans is of deepening dysfunction.

“Each party is going its own way — you get the impression they’re already in election campaign mode,” Clemens Fuest, the head of the Ifo economic think-tank, told ZDF television. “If that’s the case, if the chancellor can’t manage to get the government to pull together, then they should actually end the coalition.”

Deep economic divisions

Last week, Habeck proposed a state investment fund to help companies of every size. It was promptly rejected by both Lindner and Scholz. Lindner’s party organized a meeting with leaders of business associations for Tuesday, the same day that Scholz had already arranged a closed-door meeting of his own with industry and union leaders.

Scholz said that “we must get away from theater stages; we must get away from something being presented and proposed that then isn’t accepted by everyone.” Still, his coalition partners weren’t invited to his own meeting with industry leaders.

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