NewsScholz's economic measures will not help avoid a recession in Germany, experts...

    Scholz’s economic measures will not help avoid a recession in Germany, experts estimate

    Although the package will help the most vulnerable, it is unlikely to fully mitigate the impact of high electricity prices, say economists consulted by Bloomberg.

    The aid package worth 65,000 million euros (about 64,350 million dollars) aims to support German citizens in the face of rising energy prices will not stop the economic decline, experts from the Dutch bank ING Groep NV warned. The set of measures, announced on September 4, includes subsidies for low-income households, students and retirees, as well as a maximum limit on electricity prices.

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    “Although the announced package will support the most financially vulnerable, it is doubtful that it will be enough to fully mitigate the impact of rising electricity prices,” said Carsten Brzeski, an economist at ING, on Monday, reports Bloomberg. The German government provides almost no aid to businesses and households that are not in welfare programs, so the package will not help “prevent the economy as a whole from slipping into recession.”

    Another expert, Joerg Kraemer, an economist at the German bank Commerzbank, warned that the aid now announced creates “the illusion that a large part of the population can be protected from the consequences of rising energy prices.” Furthermore, he stressed that the package may even aggravate the situation regarding the prices of consumer goods. According to analyst Greg Fuzesi, of the bank JPMorgan Chase & Co, quoted by Bloomberg, “there are many issues to take into account to accurately measure the incidence [del paquete de ayuda] in inflation”, given the cessation of supplies of Russian gas through the Nord Stream 1 gas pipeline, after which “new risks may materialize”.

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    Source: RT

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