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

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

BERLIN, June 13 (Reuters) – German Finance Minister Christian Lindner reported there was a risk of a period of time of superior inflation and lower growth next Russia’s invasion of Ukraine, which had driven currently large inflation up even more even now.

“Stagflation is a doable scenario,” he advised a conference of household-owned organizations in Berlin on Monday.

He claimed the value stress could greatest be countered by unwinding the subsidies that had earlier been provided out to prop up the economy and that Germany and Europe experienced to return to fiscal discipline.

He extra that Germany’s constitutional personal debt brake, at present suspended, would arrive back again into force upcoming calendar year. That would imply a reduction in the stage of new borrowing from this year’s 140 billion euros ($146 billion) to just 10 billion euros.

($1 = .9591 euros)

Reporting by Christian Kraemer writing by Thomas Escritt Modifying by Christoph Steitz

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