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

German Finance Minister Christian Lindner attends the weekly cupboard assembly at the Federal Chancellery in Berlin, Germany, June 8, 2022. REUTERS/Hannibal Hanschke

BERLIN, June 13 (Reuters) – German Finance Minister Christian Lindner mentioned there was a hazard of a time period of significant inflation and low development next Russia’s invasion of Ukraine, which experienced driven previously superior inflation up further nonetheless.

“Stagflation is a attainable circumstance,” he instructed a meeting of family members-owned enterprises in Berlin on Monday.

He stated the cost pressure could very best be countered by unwinding the subsidies that had previously been given out to prop up the economic climate and that Germany and Europe experienced to return to fiscal self-control.

He included that Germany’s constitutional financial debt brake, presently suspended, would occur back into drive future yr. That would indicate a reduction in the level of new borrowing from this year’s 140 billion euros ($146 billion) to just 10 billion euros.

($1 = .9591 euros)

Reporting by Christian Kraemer crafting by Thomas Escritt Editing by Christoph Steitz

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