situation report

Aug 19, 2019 | 15:11 GMT

1 min read

Germany: Fiscal Strength Sufficient to Withstand Potential Economic Crisis, Finance Minister Says

What Happened: Germany is well-placed to react to a future economic crisis and could make an additional 50 billion euros (roughly $56 billion) available for public spending, German Finance Minister Olaf Scholz said Aug. 18, according to Reuters.

Why It Matters: Scholz's comments suggest a shift by the German government on potential spending increases as it is facing a looming recession in the third quarter after German officials said last week that there was no need for a stimulus package. However, Annegret Kramp-Karrenbauer, leader of the co-ruling Christian Democratic Union, said last week that her party would defend fiscal austerity, indicating potential disagreements within the governing coalition over the issue.

Background: Germany's economy contracted by 0.1 percent in the second quarter over the previous three months.

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