Commerzbank economist Joerg Kraemer said in a report that Germany’s debt problem
is increasingly converging with France’s. He said Berlin has responded to
energy-price shocks with public spending, including two fuel tax cuts that
disproportionately benefited wealthier households and reduced incentives to save
energy. Against a fragile governing coalition and policy divisions, Kraemer
expects Germany’s budget deficit to widen to about 4% of GDP this year—near
France’s 5%—and called for prioritizing public finances and raising
competitiveness to support growth.
