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to point to the find it here. repos every weekend on dw, the, in germany's headed for snap elections on february 23rd at the heart of the discontent. the economy joining me now is already got mom in the air from the german council of economic experts. thank you for joining us. you're welcome. how do you see fresh elections reading some lights into the german economy if they can? yeah, that is the potential. i'm hoping for that potential to prevent the current government from, from borrowing more. the point of that, that rate was to say, well, if we like, keep increasing. how much of a boring that will be at the detriment of future generations. we have to think about the future. now when we're pointing out, is that the effect can sometimes go in the opposite direction. because with the

little money we have less, we might spend it on the sinks, we have to cover all the homes. we have to fill and not think about the future, not the thing in particular, kinds of questions about 3 areas. you see shoots deficits and public transport, the infrastructure of public transport. we see obviously a deficit in terms of defense spending being having modern defense capacities. and then the 3rd one, we emphasize in this yes report is education. it's both the schools, the buildings, but also investment in the actual education in particular, early stages, off of a child's education. and so we want to find ways to institutionalize to, to, to make it more binding, but those copy neglected. so the, a recent survey of economist by the eco institute for economic research found that only about half of the economists want to reform the debt break. germany has also only just gotten inflation under control. would it be a little bit irresponsible to potentially go into more debt at this time?

yeah, so indeed, with this new proposal, we actually not say a borrow more. we don't want to increase the fiscal space in. the emphasis is quite the contrary. we want to is what we're saying. this is what of a, you know, fisco financial capacity. you have think about how you're spending the money and we do things as a lied reform of the dead. frank would be useful if we want to make it economically smarter, but indeed the costs are also things. that's something along those lines. some graphs, rails along those lines have actually been useful. europe's economic challenges are long right now from cutting carbon to funding industrial subsidies to supporting pensions for an aging population. but none of this which is easily affordable. on top of that, we've seen the low re election of mr. trump, in the united states, just as europe's ability to finance the this long list of demands has weekend is this list of was simply insurmountable. i hope not,

and we will do our best to contribute to helping with our commented one important response to uh, don't try being being re elected, which be that su pins as european countries. we get that together and become close that we, we utilize the past that was in euro, there won't be a trait for, they won't be this kind of tactic and strategizing where one tries to win the over the other. so let's take advantage of the original idea of the repeating union and lower the barriers for trade for capital markets union, all these ideas we have kept talking about for years and years. but then they always stumbled like in terms of implementation because of national interest. you know, every country wants they have solvency law to be the one that's being used. now is the moment where we don't have time for that. we just need to use this crisis to overcome these hurdles and grow together. become one big economic power that can

stand up to the us also to china and russia. as we have seen what color is ation in the world. germany's economy has been sluggish. it's particular at least a start. when you look at the top 5 economies in the world, what does the trump $2.00, administration need for the german economy, which is projected to be in recession again this year? yeah. so in the past, the germans economy has really benefited from exports. we were exports strong nation, much to the dislike of mister tron. well, i guess it's good news for him that our explore. it is currently not as strong as you would like it to be. uh, we do hope that we will gain competitive enough. uh, again, going forward, however, we have to be particularly careful in um, towards the u. s. s. we have observed that once have been hampering our export has to be in china to a large extent. china is a 2 competitor and it's also demanding less of our export goods as they're

producing themselves now. so beyond your u. s. has, if anything gains as important as a market for us. and so, um that is indeed aggravating the problem. now, as far as the european companies at the german companies are concerned, when they hear trump say, well, you know, i want you to produce in the us for the us. that kind of ready to do that, that autumn will buy companies already doing that. i assume they can just kind of ramp up their production. they are um, that's what they announcing. that's a lot of course. what's helpful for german production and german a g d p. so i do hope that we will come to an agreement. i will say that all this talking at the campaign, riley's about tariffs being his paper drawer, then he wants to like impose tablets, terrace right and left. i still want to see what actually happens because what trump is also seen is that inflation was a winning issue. for him, he has one lastly on inflation on people struggling to pay for the groceries being

upset about those prices. if you raise try a terrorist, that's a guaranteed way to for the increase inflation. so maybe we'll find the middle ground heavy. don't go quite as extreme, the eco institute has also called for germany to prepare for a trump presidency. they cited a similar to what you've been saying, a more unified you services market. but they also said that there should be, quote, credit, all retaliatory measures against the us, but with the german economy in the position it's in now, does germany have the economic has for any kind of counter measures that could stand up to the us? yeah, so again, i would not want to emphasize with germany alone, khan academy or can know what to do. i would think it has to be in corporation with the other european aside from yeah, veritable economic power. and so hopefully we can speak in one voice. now as far as retaliatory measures are concerned, i very much hope that we do not have to go down that route, that instead focusing on all energy and all money on becoming more competitive and

becoming country where in terms of interest, infrastructure, political environment, it is actually a good place for companies to work and where we work really hard to make labor costs the big issue in germany in particular. um, she paused by being open to any gratian of work caused by integrating people better into the labor markets, including people love. yeah, they've already retired and women like exploiting all these margins. we have, i think that's the marginal dollar or the marginal times spend. well rather than focusing on what types, right, management, you mentioned labor problems. this reminds me of the structural challenges that had been facing germany for a long time. and recently i was reading a report that was dated from 2013 by the o, a c, d. they were already talking about immigration problems then. so then, so easy to ask, why is germany so slow to tackle these kinds of issues and how can these structural challenges be tackled? yeah, i don't cried. know why?

uh, why we're so slow. i would completely agree the writing has been on the wall even before 2013. i mean, if there's one type of economically relevant development, that's well predictable. it's demography and so i would say 30 years ago we could predict already that this was like not going in the direction in which we run test . imagine it would go when we designed our social security system when we've designed all our labor markets. and so will open us to, um, immigration to attracting people from abroad is what is originally needed. i would say germany has improved over the past years. however, the big source of immigration, of, of more labor force entering half mean other european countries. now these have somewhat similar issues right now in terms of the demographic development, maybe not quite as rapidly as germany by the aging or aging is happening they as well. so we have to branch out. we have to find corporations as countries which may

have the opposite problem, like in the government. recently, evans with his day off when they extend it a trip, and i hope we will speed up. now, this is no excuse for the semester. that's not happening early on, but that's how policy and often is our role as a counselor or in this yes report is to emphasize, we have to keep thinking about the long run. hands are discussing about future end to low run investment. also from the public side, but the daily business of politics unfortunately often and the emphasizes, as you mentioned, also pension system, a security system. is it like a system like we have right now? won't work it with an aging society. somebody has to address that, and that's just so much resistance among politician to be the one be the black sheep who has to put it into place. snap elections has been and calls for 3 months . so now the 2 leading parties at the moment are both right. we're leaning parties the see, do you see us, you and then the alternative for germany in 2nd place. this makes me wonder how

much of it site is there for some of the, the hard medicine for the structural problems. neither of these parties are very in favor of more immigration, for example, and they're both in favor of keeping the debt break as is. so is the current political environment going to allow the structural problems to be tackled? yeah, i mean that 2 types of hard medicine, one type goes one, the direction off. how do i said more incentives to work, which might include according to what these parties are saying, maybe lowering social benefits if you, if you don't have work. so there's some kind of incentive ization may be possibly late lodge on participation in the labor market coming from that type of hard medicine. i hope it would be implemented wisely, but i think it's smartly about how to adjust module incentives by going from one system to the other. that was last yes report. but then in uh, the 2nd type is that of a city you for sure, is thinking a lot about how to make our industry more competitive without only going in the

direction of subsidization. so i think that is part of, of, of, of heart medicine. in terms of the flip side, in terms of needing more labor. i would agree that we con, filled the gap with a complete focus on what we can do domestically. even if we get all the women to participate full time in the labor market, we get all the retired people who are able to, to participate. we have more needs. so we do need to remain open towards immigration and that will be a hot balance to a strike. mr. trump one beyond winning on the installation platform, he went on the immigration or anti immigration platform on last different taishan platform. so that is, this is worry that it says resentment building up in the population in the us. i think that's unparalleled trans. yeah. that has to be taken seriously with out polarizing was out becoming send a form for a big that's a very hard task and i so hope that the next government will be ready for it on rica and mel mendez from the german council of economic experts. thank you for

joining dw business. oh, you're very welcome. the the new will tell you the story. we have a getting a visa is more difficult than finding gold hosted to use force and for the future in the stories and issues that are being discussed across the country. news african next on d w, the living chinese d w. how to make greener choices in your, in everyday lives. but honestly, try to be working 32 hours

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