“We don’t see the chances”
IfW boss calls politicians “fear of change”
9/2/2023 3:57 p.m
The federal government gets a real lecture from an economic expert. Moritz Schularick from the Institute for the World Economy calls politicians “fear of change”. He thinks the industrial electricity price is wrong and sees the money better spent elsewhere.
The President of the Kiel Institute for the World Economy (IfW), Moritz Schularick, sharply criticizes the economic policy of the federal government. “We have become fearful of change – that applies to left and right,” he told the “Spiegel”. Germany is “caught in small-scale defensive struggles, doubts, worries and fears – we don’t see the opportunities, we only discuss the costs and difficulties,” Schularick complained. “This is a clear failure of politics.”
“The conservative camp maintains a fetish of the debt brake and does not trust the state to finance sensible future investments through debt,” said the economist. “And on the left, you’re dreaming back to the industrial age of the 1970s, where we all go to the factory and cook steel.” Both are “not a model for the future”.
Schularick is critical of a reduced industrial electricity price, as demanded by the Greens and parts of the SPD. “When we take tax money into our hands, it is not to subsidize industries that we already know today are not tomorrow’s growth sectors,” he said. “We should instead put our resources into research, into education, into our children and into new, green industries.”
A million homes in three years
The government also underestimates the problem of the housing shortage. “An SPD chancellor could issue the mission that the state should build one million apartments in the next three years,” said the IfW president. However, he is not hopeful that the government will soon tackle fundamental reforms. “We Germans like to put off reforms,” said Schularick. The pressure on politicians must increase.
During the election campaign, Chancellor Olaf Scholz promised to build 400,000 apartments per year. However, the goal is unlikely to be reached. Scholz has also spoken out against an industrial electricity price, as demanded by the Greens, but also by the SPD parliamentary group in the Bundestag. The FDP is also against it.