Germany's economy: The economic experts are weakening themselves
The figures from the "economic experts" do not yet indicate the boost that the new federal government's massive spending programs are supposed to bring. They predict the third year of no growth, and economic output will only grow by one percent in 2026.
One can argue whether this is the "most serious economic crisis in the history of the Federal Republic," as the Minister of Economic Affairs uninspiringly stated. However, it is the most persistent and complicated, because nothing can be gained through crisis management. It's about structural change.
Seen in this light, it's actually good news that the additional billions don't seem like an economic stimulus package. The money could easily ignite a flash in the pan that ultimately does more harm than good. The government must resist this temptation, just as it must resist the distribution of benefits.
The Council of Economic Experts doesn't trust the new coalition in this regard. The report is largely a vote of no confidence in a policy that could quickly see its money slip through its fingers. And the concern is justified when you look at some of the agreements in the coalition agreement—or hear how the Foreign Minister has just earmarked five percent of gross domestic product for the defense budget.
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The "economic experts" are therefore rightly calling for clear rules to actually channel the money into additional investments and prevent hidden shifts into government consumption. But it's unlikely that the government will adopt these formal rules—especially since that would mean a further delay.
At least the experts' arguments should be convincing. They have thankfully clearly calculated, in several scenarios, what will happen if the special infrastructure fund is not invested purposefully in productivity, structural change, and competitiveness: The billions will disappear without a lasting effect and drive up the debt ratio.
This will also be the central message to the Chancellor, the five experts assured on Wednesday. Hopefully, they at least reached a consensus in their discussion with Friedrich Merz, because the professional and probably also personal disagreements within the committee could once again not be concealed.
Professor Veronika Grimm cast dissenting opinions against the majority on three of the three key topics in the spring report. The lowest common denominator remains the economic forecast figures. However, this committee is least needed for these.
The problem isn't the diversity of opinions within the Council of Experts. That has always existed, and it would be alarming if only one wisdom prevailed there. Grimm's positions must also have their place there.
However, their statements in the report also suggest that they didn't spend much time trying to find common ground. In some cases, it seems more about demonstrative distancing than fundamental disagreement.
By law, the government can expect help in reaching its decision from these three female and two male scientists. However, at the moment, political confidence in the panel is likely to be low—and with good reason.
The task of using hundreds of billions of dollars far-sightedly, efficiently, and without harmful side effects practically cries out for scientific advice. But the supposedly "wise" experts are themselves diminishing their effectiveness.
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