German finance minister warns of stagflation risk, pledges return to fiscal rigour
German Finance Minister Christian Lindner attends the weekly cupboard assembly at the Federal Chancellery in Berlin, Germany, June 8, 2022. REUTERS/Hannibal Hanschke
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BERLIN, June 13 (Reuters) – German Finance Minister Christian Lindner explained there was a risk of a time period of large inflation and minimal expansion pursuing Russia’s invasion of Ukraine, which experienced driven already large inflation up even more nonetheless.
“Stagflation is a achievable state of affairs,” he told a convention of loved ones-owned enterprises in Berlin on Monday.
He said the value strain could best be countered by unwinding the subsidies that experienced earlier been presented out to prop up the economy and that Germany and Europe experienced to return to fiscal self-control.
He additional that Germany’s constitutional debt brake, at present suspended, would arrive back again into force up coming calendar year. That would imply a reduction in the stage of new borrowing from this year’s 140 billion euros ($146 billion) to just 10 billion euros.
($1 = .9591 euros)
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Reporting by Christian Kraemer creating by Thomas Escritt Modifying by Christoph Steitz
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