BERLIN, GERMANY – NOVEMBER 15: German Finance Minister Christian Lindner gives a statement to the media at the Chancellery following the weekly government cabinet meeting on November 15, 2023 in Berlin, Germany. The topic was a ruling by the German Constitutional Court declaring that the coalition government’s shift of federal money in 2021 originally earmarked to alleviate the consequences of the coronavirus pandemic and that had gone unused towards climate change mitigation measures was unlawful. (Photo by Sean Gallup/Getty Images)
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Germany’s finance minister on Friday offered up a new analogy for his country’s ailing economy, following months of debate over whether Europe’s traditional powerhouse had become the “sick man of Europe.”
“I know what some of you are thinking, Germany probably is a sick man. Germany is not the sick man,” Christian Lindner told World Economic Forum delegates in Davos, Switzerland, at a Bloomberg panel on Friday.
Lindner said that “after a very successful period since 2012 and this year of crisis, Germany is a tired man after a short night.”
References to Germany as the “sick man of Europe” resurfaced last year. The economy avoided recession at the end of 2023 but shrank by 0.3% year on year, as it grappled with high energy costs, inflation and interest rates. Germany’s manufacturing output, excluding construction, dropped by 2% in 2023.
The “sick man” title had first been used to describe Germany’s economy in 1998 as the country navigated the costly challenges of a post-reunification economy.
Growth ‘wake-up call’
Lindner said that “low-growth expectations are partly a wake-up call, and now we have a good cup of coffee, which means structural reforms, and then we will be continuing to succeed economically.”
The latest data suggests the German economy faces a prolonged slump, with research firm Capital Economics forecasting no growth for the country in 2024.
Germany faced a budgetary crisis at the end of last year, after a constitutional court ruled its reallocation of unused debt was illegal for breaking the country’s fiscal rules.
Following negotiations, Germany arrived at a budget deal that kept debt restrictions in place for 2024. The government is aiming to save 17 billion euros ($18.51 billion) in its budget with cost cuts and by ending climate-damaging subsidies.
Speaking at the WEF panel on the global economic outlook on Friday, Lindner said, “We had to solve our debt and deficit issues, which has made me … the loneliest minister in Cabinet, but we succeeded to solve our debt issues.”
— CNBC’s Ruxandra Iordache and Hannah Ward-Glenton contributed to this story.
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