The Great Debate UK

Germany’s political and economic phoney war


paul-taylor– Paul Taylor is a Reuters columnist. The opinions expressed are his own –

Germany is becalmed by a political and economic phoney war five months before this year’s most important European general election. But a lack of real economic debate now risks prolonging the political stalemate and delaying much needed reforms.

The export-dependent economy is shrinking faster than any other major economy except fellow exporter Japan. Output is expected to contract by an eye-watering 6 percent this year. German banks turn out to have bought as many toxic assets as their British or American counterparts, proportionate to their balance sheets.

Yet the grand coalition government has just reaffirmed, with broad political backing, that there will be no new stimulus package. And there is little public debate about whether the government has the right economic strategy.