Germany's Debt Strategy Post-Elections: Analyzing the Delay

Germany will delay its plan to reduce public debt as part of the EU's framework until after February's snap elections. The delay aims to address economic challenges and create conditions for future investments. Germany is expected to be the worst economic performer among G7 in 2024.

Germany is set to postpone its public debt reduction plan submission to the European Commission until after the snap elections in February, revealed the country's stability council, tasked with aligning federal and state finances.

This submission is a part of the European Union's initiative to manage debt post-COVID-19, which saw countries borrowing heavily to prevent economic deterioration. German Finance Minister Joerg Kukies emphasized that the plan targets establishing reliable conditions for future investments, essential for reviving Germany's economic growth.

However, forecasts indicate that in 2024, Germany will likely rank as the worst performer economically among the Group of Seven (G7) nations. Representatives of the federal and state governments acknowledged in a council meeting that crafting balanced budgets will become more challenging due to pressing economic and fiscal hurdles.

(With inputs from agencies.)