April 17, 2024


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German finance minister warns of stagflation risk, pledges return to fiscal rigour

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German Finance Minister Christian Lindner attends the weekly cupboard conference 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 stated there was a possibility of a period of high inflation and reduced development subsequent Russia’s invasion of Ukraine, which experienced pushed previously significant inflation up even further however.

“Stagflation is a possible state of affairs,” he told a conference of household-owned enterprises in Berlin on Monday.

He said the price tag strain could very best be countered by unwinding the subsidies that experienced formerly been given out to prop up the economic system and that Germany and Europe had to return to fiscal willpower.

He added that Germany’s constitutional personal debt brake, at present suspended, would come again into pressure future year. That would imply a reduction in the amount 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 writing by Thomas Escritt Enhancing by Christoph Steitz

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