Economic scenario: Economists criticize Scholz for his earlier financial miracle forecast | EUROtoday

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Economists criticize Scholz due to his earlier financial miracle forecast

Olaf-Gersemann01
German Chancellor Olaf Scholz attends the weekly cabinet meeting at the Chancellery in Berlin, Germany, February 28, 2024. REUTERS/Liesa Johannssen German Chancellor Olaf Scholz attends the weekly cabinet meeting at the Chancellery in Berlin, Germany, February 28, 2024. REUTERS/Liesa Johannssen

Chancellor Olaf Scholz: His financial miracle is a very long time coming

What: REUTERS

About a 12 months in the past, Olaf Scholz promised a brand new financial miracle like within the 50s and 60s. Even wanting again, the forecast on the time is astonishing. Well-known economists criticize the Chancellor's phrases.

EIn the 12 months after his oft-quoted financial miracle forecast, main German economists are clearly criticizing Chancellor Olaf Scholz (SPD). “The estimates of production potential that the Council of Experts, the EU Commission and many research institutes regularly prepare spoke a different language then, as they do now,” says Volker Wieland, economics professor from Frankfurt/M. and long-time member of the “Five Wise Men”.

Olaf Scholz mentioned on March 10, 2023: “Because of the high investments in climate protection, Germany will be able to achieve growth rates for some time, as last happened in the 1950s and 1960s.”

The necessities are essentially completely different as we speak, says Leipzig economics professor Gunther Schnabl. “The economic miracle in the 1950s was driven primarily by market economy reforms and performance under Ludwig Erhard,” mentioned the Leipzig economist.

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“Today we are experiencing exactly the opposite: inflation, subsidies, excessive regulation, excessive state intervention and an uncontrolled expansion of the welfare state are undermining the market economy foundations of growth.”

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In retrospect, Scholz's forecast can also be outstanding as a result of even then, even past the elemental selections, an financial weak spot was looming: “Gross equipment investment in the manufacturing sector in 2022, adjusted for prices, was still eight percent below the level of the pre-Corona year 2019 “, says Michael Hüther, director of the employer-oriented Institute of the German Economy (IW).

“This means that the manufacturing sector has not only been on a recessionary development path since the pandemic or the energy price shock, but even before that, which indicates structural problems.”

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https://www.welt.de/wirtschaft/article250356624/Konjunktur-Oekonomen-kritisieren-Scholz-wegen-frueherer-Wirtschaftswunder-Prognose.html