Lagarde Calls on Germany to Invest More, Raise Wages
World Economy

Lagarde Calls on Germany to Invest More, Raise Wages

While in Germany, IMF chief Christine Lagarde has argued that larger German investments could help reduce regional and global imbalances that she’s concerned about. Her advice did not go down well in Frankfurt.
The head of the International Monetary Fund, Lagarde, on Thursday joined calls from a growing number of economists for substantially bigger German investments in the years ahead, DW reported.
Speaking at a conference with top economists and policymakers in Frankfurt, Lagarde noted increasing investments would “help to reduce global imbalances which we’re concerned about at the IMF.”
She also called on German policymakers and companies to stoke wage growth so as to boost inflation in the 19-member eurozone. “We have also advised the government in Berlin to spend more on reforms that help women go back to work, such as opening more child care centers and kindergartens” as well as “creating training programs for refugees”.
Lagarde hinted she saw no reason why Germany couldn’t spend budget surpluses to invest more in public infrastructure such as roads, railways and digitalization.
Some of her remarks met with a rather frosty reception, though. German central bank chief Jens Weidmann argued his country should “maintain a safety margin to the existing fiscal rules in the face of looming demographic changes”.
Chancellor Angela Merkel’s conservatives have pursued a policy of balanced budgets calling for paying down old debts and avoiding creating new ones.
The question of public spending has been a key source of friction between Merkel’s conservatives and the Social Democrats, who reached a preliminary deal on forming a coalition government, with the details yet to be hammered out.
Bundesbank chief Weidmann insisted that increased spending was not the solution, arguing that what’s required was “a shift in public expenditure from consumption to investment”.


Short URL : https://goo.gl/4noKBu
  1. https://goo.gl/MERZKE
  • https://goo.gl/PHhe43
  • https://goo.gl/9FVqFZ
  • https://goo.gl/5kR4Xs
  • https://goo.gl/Bbzqj3

You can also read ...

While China tries to alleviate its demographic crunch, the aging society means a pension shortfall.
Forget that image of sweatshops making all kinds of cheap...
Russia Economic Recovery Underway
Retail sales in Russia picked up in April, while real wages...
In 2017 banks had total mortgage lending of around $352 billion.
High levels of household debt are the greatest risk to Sweden’...
Greece at Crucial Point
Discussions are heating up over future debt repayments for...
Peru Economy Strengthens
Economic growth in Peru strengthened in the first quarter...
Brazil CB Keeps Rates on Hold
Brazil’s central bank considered cutting interest rates last...
Saudi Gov’t Told Not to Boost Spending
The International Monetary Fund urged the Saudi government not...
EU Tells Italy to Cut Debt, Warns of Euro Spillover
Italy’s incoming government should aim to cut its heavy public...

Add new comment

Read our comment policy before posting your viewpoints