Economics
Berlin’s Maddening Aversion to Fiscal Stimulus: A Traders’ Guide
- Constitutional rules limit deficit spending in Germany
- Merkel starting to waver as Europe’s biggest economy slows
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Over the past decade Germany has saved like few other nations, slashing its debt from 83% of gross domestic product to 60%. But now the global economy is slowing, there’s talk of recession in Berlin, and institutions like the IMF are calling on Chancellor Angela Merkel to loosen the purse strings and to keep Europe’s economic engine going.
Investors had better not hold their breaths. The Germans have a complicated relationship with deficit spending.