Germany eyes stimulus in case of deep recession
It has taken a while, and would require a ‘deep’ recession, but German politicians are finally open to the idea of government stimulus. Germany’s economy contracted in the second quarter of this year and could be heading for a recession. However, significant government stimulus is likely to depend on a more severe recession than the one that could be approaching now. In addition, the EUR 50 billion stimulus package being mentioned would be less than last year’s government surplus alone. With a debt-to-GDP ratio rapidly falling towards 60%, an exception in a world of debt-stricken governments, perhaps a somewhat more ‘courageous’ policy is warranted.
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