"There's a substantial amount of potential in Trump's platform that resonates with Germany's needs."
In a persistent economic crisis, renowned economist Gunter Schnabl advocates for a course correction and a return to market-based principles. He believes that Germany can learn from certain aspects of Donald Trump's presidency. The economic situation has long been an issue of concern, and while the causes have yet to be fully diagnosed, Schnabl points to the weakening of market-based economic principles since the turn of the millennium as a significant factor.
According to Schnabl, the market-based principles that have eroded include monetary stability, free prices, competition between companies, private ownership, freedom of contract, liability, and a lean state. He argues that external shocks played a role as well, but they do not alone explain the loss of momentum in the German economy.
The violation of market-based principles is evident in various areas. Monetary stability, for example, has been compromised due to the European Central Bank's purchase of government bonds and the manipulation of other important prices, such as interest rates, wages, and rent. Competition between companies has also been impacted by extensive state intervention, including subsidizing large corporations at the expense of small businesses and rescuing banks following the financial crisis.
In Schnabl's view, Germany is no longer a pure market economy, but rather a system that oscillates between planned and market-based elements. He believes that returning to market economy principles, such as monetary stability, reducing government spending, and freeing the economy from overly strict regulations, is essential for improving long-term growth prospects.
While there may be initial hardships associated with this economic course correction, Schnabl argues that reforms are necessary for the medium-term health of the economy. He also points to some potential models, such as Argentina and Donald Trump's policies, that could provide lessons in effectively implementing reforms.
References:- ntv.de (https://www.ntv.de/wirtschaft/Wirtschaftskrise-in-Deutschland-Die-Loesung-von-Gunter-Schnabl-artikel-100-6673948.html)- economist.com (https://www.economist.com/leaders/2021/06/19/the-german-economy-needs-a-more-ambitious-vision)- brandeis.edu (https://www.brandeis.edu/merge/merged-public-policy-review/close-to-home/china-germany-and-the-european-union-falling-behind-in-the-era-of-populism.html)
(Enrichment Data, included sparingly, highlights economic challenges Germany faces, potential policy responses, and broader context, which could contribute to a more comprehensive understanding of the article's content)
The persisting economic crisis in Germany has led Schnabl to suggest a return to market-based principles, as he sees a significant decline in these principles since the turn of the millennium. The weakening of monetary stability, free prices, competition, private ownership, and other market-based principles have negatively impacted the German economy.
