Germany: Adopting a fiscal expansionary stance – BNPP

In view of Raymond Van der Putten, Economist at BNP Paribas, even though the German economy is operating close to potential, fiscal policy will be very expansionary in the coming years.

Key Quotes

“The positive elements in the programme are the investment in digital infrastructure and education.”

“However, new pension promises risk compromising the government budget’s stability in the longer term.”

“On the eurozone, the grand coalition pleads for a return to the old concepts as best recipe for stability.”

“Even though Chancellor Merkel subscribes to the need of strengthening the eurozone, the policies to achieve this remain rather vague or fall back on old concepts. No major changes are expected in this area.”