| 19 April 2024, Friday |

Germany’s incoming finance minister rings alarm bell on inflation

On Tuesday, Germany’s incoming Finance Minister, Christian Lindner, committed to support stable public finances and debt reduction across the eurozone so that the European Central Bank (ECB) could battle inflation without hesitation if necessary.

Lindner’s comments on Twitter come after statistics on Monday revealed that German consumer price inflation increased further in November, reaching its highest level in nearly three decades.

“Inflation is a valid source of concern. In the event of currency depreciation, we’ll watch how it develops after the epidemic “Lindner stated this in his tweets.

Lindner, whose business-friendly Free Democrats are set to be the smallest junior partner in a three-way coalition with the center-left Social Democrats and the pro-spending Greens, said the new government would not push prices any further.

“Therefore, there’ll be no tax increases,” Lindner said, adding that the three parties agreed to reduce electricity prices by abolishing a special surcharge introduced to finance the expansion of renewable energies.

Lindner also promised that the government would give back any additional revenue caused by rising carbon prices to households.

“In Europe and Germany, we’ll advocate solid public finances and limiting debt. Excessively high government deficits would restrict the ECB from fighting inflation if necessary,” Lindner warned.

His remarks were echoed by outgoing Bundesbank President and ECB policymaker Jens Weidmann who said the ECB should keep an arm’s length from governments by resisting pressure to bankroll indebted states or pursue goals other than price stability.

  • Reuters