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POLITICS

New president: dare to have more Europe

Joachim Gauck used his first speech as German President on Friday morning to call for the country to “dare to have more Europe” in times of crisis, and for determination in facing down extremists.

New president: dare to have more Europe
Photo: DPA

Gauck, who is the first head of state from the former communist east, delivered the impassioned appeal for more European “solidarity” to members of both houses of parliament, in the sunlight-filled main chamber of the Reichstag building.

“We must keep saying yes to Europe,” he said. “Particularly in times of crisis, we must dare to have more Europe.”

Languishing under the Nazi and then the communist dictatorships had fuelled his dream a united Europe living in peace and prosperity, the 72-year-old said.

“Europe was the promised land for my generation.”

“For my grandchildren, Europe has long been part of their day-to-day reality, with freedom across borders and the opportunities and concerns of an open society. This reality is an achievement, not only for my grandchildren.”

Germany, as the rescue-fund paymaster for Europe’s stricken member states, has come under pressure throughout the sovereign debt crisis to boost its contributions to the bailouts in the face of Chancellor Angela Merkel’s resistance.

The turmoil has also exposed old rifts, with protesters on the streets of Athens branding Merkel a “Nazi” for her hard-line stance.

Gauck, a Lutheran pastor and former East German democracy activist, said he would make the integration of Germany’s large immigrant population and the struggle against the far right priorities of his presidency.

In a rousing passage of the 23-minute inaugural speech, Gauck said Germany would stand united in the fight against extremists.

“Your hatred will only spur us on,” he thundered in reference to a group of neo-Nazi militants thought to have killed 10 people – mostly shopkeepers of Turkish origin – over a seven-year period.

The murder spree has sparked a new drive to ban the anti-immigrant National Democratic Party of Germany, which had ties to the suspected murderers.

Gauck will make his first trip abroad as president to Poland next week.

AFP/jcw

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ECONOMY

‘Turning point’: Is Germany’s ailing economy on the road to recovery?

The German government slightly increased its 2024 growth forecast Wednesday, saying there were signs Europe's beleaguered top economy was at a "turning point" after battling through a period of weakness.

'Turning point': Is Germany's ailing economy on the road to recovery?

Output is expected to expand 0.3 percent this year, the economy ministry said, up from a prediction of 0.2 percent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a “turning point”.

“Signs of an economic upturn have increased significantly, especially in recent weeks,” Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 percent, from a previous prediction of 2.8 percent, and sees the figure falling below two percent next year.

READ ALSO: Can Germany revive its struggling economy?

“The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money,” said Habeck.

“So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery.”

Energy prices — which surged after Russia’s 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above one percent, but these were dialled back at the start of the year as the economy continued to languish.

‘Germany has fallen behind’

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers’ index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

German Economics Minister Robert Habeck

Economics Minister Robert Habeck (Greens) presents the latest economic forecasts at a press conference in Berlin on Wednesday, April 24th. Photo: picture alliance/dpa | Michael Kappeler

Despite the economy’s improving prospects, growth of 0.3 percent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

“Germany has fallen behind other countries in terms of competitiveness,” he said. “We still have a lot to do — we have to roll up our sleeves.”

READ ALSO: Which German companies are planning to cut jobs?

Already facing turbulence from pandemic-related supply chain woes, the German economy’s problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country’s crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, “tight monetary policy has not yet been lifted.”

In addition, disagreements in Chancellor Olaf Scholz’s three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP party, a coalition partner, faced an angry backlash from Scholz’s SPD when it presented a 12-point plan for an “economic turnaround”, including deep cuts to state benefits.

Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of “stabilisation” in the economic forecasts but stressed that projected medium-term growth was “too low to sustainably finance our state”.

“There are no arguments for postponing the economic turnaround,” he added.

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