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 stated there was a possibility of a time period of large inflation and very low progress pursuing Russia’s invasion of Ukraine, which experienced driven now large inflation up even more even now.

“Stagflation is a doable state of affairs,” he explained to a conference of relatives-owned businesses in Berlin on Monday.

He said the price tag force could very best be countered by unwinding the subsidies that had beforehand been given out to prop up the financial system and that Germany and Europe had to return to fiscal willpower.

He additional that Germany’s constitutional personal debt brake, at present suspended, would arrive back into pressure up coming 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 creating by Thomas Escritt Modifying by Christoph Steitz

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