German economists fear complacent coalition risks national decline

December 17, 2013

Germany’s Grand Coalition under Chancellor Angela Merkel takes the helm on Tuesday under a blizzard of criticism from economists of all stripes, attacked for doing nothing to stop the slow erosion of German dynamism and for insisting rigidly on further austerity for Europe.

“It is a lost chance for Germany’s future: the deal puts extra strain on business and makes Germany a less attractive place for industry,” says Ulrich Grillo from Germany’s industry lobby (BDI).

The coalition deal, thrashed out over two months of talks and endorsed by Social Democrats over the weekend, pulls Germany to the Left, rolling back Hartz IV reforms credited with transforming Germany from “Sick Man” to economic paragon over the past decade.

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