It is crucial that Germany embarks on a period of economic growth, the country’s finance minister Jörg Kukies told CNBC on Thursday, adding that structural weaknesses must be addressed.
“We’ve just gotten revised down growth forecasts for the IMF again,” Kukies told CNBC’s Karen Tso and Steve Sedgwick at the World Economic forum in Davos.
“The structural weaknesses of our economy absolutely have to be addressed,” he added. “It’s really important that we embark on a path of economic growth.”
Kukies also addressed the debate over Germany’s so-called debt brake, a fiscal rule enshrined in the German constitution. The debt brake limits how much debt the government can take on, and dictates that the size of the federal government’s structural budget deficit must not exceed 0.35% of the country’s annual gross domestic product.
The Finance Minister said some “targeted reforms” to the rule were necessary “because we have so much need for infrastructure spend for railways, on roads, on bridges, on education, on 5G, 6G infrastructure etcetera.”
“But the vast majority of investment […] in our country has to come from the private sector,” he added.
Kukies became Germany’s finance minister in November, taking over from Christian Lindner who was sacked by Chancellor Olaf Scholz after months of wrangling and clashes over the economy and budget.
Lindner’s dismissal effectively brought an end to the former German ruling coalition, which was made up of Scholz’ Social Democratic Party, Lindner’s Free Democratic Party and the Green party. This, in turn, saw Germany’s national election moved forward to Feb. 23.
“The election is all about economics,” Kukies added.
This is a breaking news story and will be updated shortly.