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 explained there was a chance of a interval of large inflation and small progress following Russia’s invasion of Ukraine, which experienced driven now large inflation up even more even now.

“Stagflation is a achievable situation,” he advised a convention of family members-owned firms in Berlin on Monday.

He said the selling price tension could most effective be countered by unwinding the subsidies that experienced previously been offered out to prop up the overall economy and that Germany and Europe experienced to return to fiscal willpower.

He additional that Germany’s constitutional credit card debt brake, at the moment suspended, would appear back again into force following year. That would indicate 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 crafting by Thomas Escritt Editing by Christoph Steitz

Our Benchmarks: The Thomson Reuters Have confidence in Principles.