{"id":4304,"date":"2019-10-24T07:06:28","date_gmt":"2019-10-24T07:06:28","guid":{"rendered":"http:\/\/euromenaenergy.com\/?p=4304"},"modified":"2019-10-24T07:06:28","modified_gmt":"2019-10-24T07:06:28","slug":"how-germany-deflected-pressure-to-spend-and-even-won-an-ally","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=4304","title":{"rendered":"How Germany Deflected Pressure to Spend and Even Won an Ally"},"content":{"rendered":"

Explore what\u2019s moving the global economy in the new season of the Stephanomics podcast. Subscribe via\u00a0Pocket Cast<\/a>\u00a0or\u00a0iTunes<\/a>.<\/em><\/p>\n

Germany backed further off a full-scale economic stimulus at a meeting of global finance chiefs, a remarkable outcome given relentless calls for action from Europe, the U.S. and international institutions.<\/p>\n

Germany\u2019s success in deflecting the pressure suggests that Finance Minister Olaf Scholz, who came to Washington with a list of counter-arguments, got off lightly from his Group of 20 colleagues at the annual International Monetary Fund conference ending Sunday.<\/p>\n

U.S. Treasury Secretary Steven Mnuchin, who publicly suggested Germany and China should enact growth-boosting\u00a0policy measures<\/a>, avoided singling out Europe\u2019s biggest economy behind closed doors, according to two people familiar with the private discussion who asked not to be identified.<\/p>\n

Some other G-20 delegates repeated the IMF\u2019s general stance that governments with fiscal leeway should do more to strengthen the global economy. The Treasury didn\u2019t immediately respond to a request for comment.<\/p>\n

\u201cThe chorus here in town is especially heavy on Germany to use its fiscal space,\u201d said Robin Brooks, chief economist at the Institute of International Finance, a Washington-based trade group for the financial industry.<\/p>\n

German officials had prepared a detailed\u00a0line of defense<\/a>: that Chancellor Angela Merkel\u2019s government is already investing extensively, including an extra 54 billion euros ($60 billion) in spending through 2032 to counter climate change.<\/p>\n

\u2018Very Positive\u2019<\/h3>\n

Those arguments appeared to win some converts. IMF Managing Director Kristalina Georgieva said governments that have room to spend more used the meetings in Washington to make their case.<\/p>\n

\u201dWhat was very positive to hear during the meetings is countries with fiscal space are actually taking measures to stimulate the economy,\u201d Georgieva told reporters on Saturday. \u201cGermany for example is putting forward a very sizable climate investment strategy that would bring significant growth and investment. They are also looking into what more could be done if necessary.\u201d<\/p>\n

With a partial U.S.-Chinese trade agreement in sight and a Brexit deal on the horizon, Scholz was emboldened in his defense of a decade of fiscal prudence in Germany. He expressed growing confidence in the government\u2019s projection that Germany\u2019s slowdown will be moderate and temporary.<\/p>\n

\u201cI think we did a lot,\u201d he said in a Bloomberg Television interview. \u201cThe more important question is what will happen to the global economy.\u201d<\/p>\n

Don\u2019t Rush It<\/h3>\n

A \u201crushed fiscal response\u201d isn\u2019t warranted as growth is expected to revive at the end of the year and success in China-U.S. talks would deliver an \u201cimmediate boost\u201d to the economy, Scholz told reporters.<\/p>\n

For all the artful dodging, Scholz faced a broad front of finance ministers, central bankers and economists pointing at Germany to do more. On Thursday, the government in Berlin cut its 2020 growth forecast to 1% from the previous 1.5%. Data due next month may show the economy slipped into recession.<\/p>\n

To shift the blame game on slow growth and inflation away from central banks, former European Central Bank official Lorenzo Bini Smaghi said governments, including Germany, have a role to play in stepping up borrowing and spending to support growth.<\/p>\n

\u201cIf fiscal policy in Germany and other countries are not willing to do that job, it is too easy to blame the central bank,\u201d he said on a panel.<\/p>\n

Low or negative interest rates in many countries leave little room for monetary policy, South African Reserve Bank Governor Lesetja Kganyago said in an interview.<\/p>\n

\u201cCountries with fiscal space must utilize the fiscal space,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Explore what\u2019s moving the global economy in the new season of the Stephanomics podcast. Subscribe via\u00a0Pocket Cast\u00a0or\u00a0iTunes. Germany backed further off a full-scale economic stimulus at a meeting of global finance chiefs,…<\/p>\n","protected":false},"author":1,"featured_media":4318,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,23],"tags":[46,48,57,68,76,77,82,86,87,90,96,99,103,107,109,111,113,137,139,146,148,160,174,183,184,201,202,209,222,230,232,233,244,246,249,256,262,263,267,277,279,280,285,288],"class_list":["post-4304","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-politics","tag-aramco","tag-athens","tag-baroudi","tag-carbon","tag-climate","tag-climate-change","tag-co2","tag-cyprus","tag-decarbonising","tag-democracy","tag-doha","tag-eastmed","tag-egypt","tag-embargo","tag-emissions","tag-energy","tag-energy-peace","tag-gas","tag-gazprom","tag-greece","tag-greenenergy","tag-international-maritime-disputes","tag-lebanon","tag-maritime-boundaries-east-mediterranean","tag-maritime-disputes","tag-offshore","tag-oil","tag-opec","tag-pollution","tag-poverty-alleviation","tag-putin","tag-qatar","tag-rosneft","tag-roudi","tag-russia","tag-saudi","tag-solar","tag-solar-power","tag-straddling-hydrocarbons-reserves","tag-total","tag-trump","tag-turkey","tag-unclos","tag-usa"],"_links":{"self":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/4304","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4304"}],"version-history":[{"count":0,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/4304\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/media\/4318"}],"wp:attachment":[{"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}