German finance minister warns of stagflation risk, pledges return to fiscal rigour

German Finance Minister Christian Lindner attends the weekly cabinet conference at the Federal Chancellery in Berlin, Germany, June 8, 2022. REUTERS/Hannibal Hanschke

BERLIN, June 13 (Reuters) – German Finance Minister Christian Lindner claimed there was a threat of a interval of large inflation and reduced expansion subsequent Russia’s invasion of Ukraine, which had driven previously significant inflation up further more still.

“Stagflation is a possible situation,” he explained to a conference of spouse and children-owned businesses in Berlin on Monday.

He explained the price tag strain could greatest be countered by unwinding the subsidies that had beforehand been supplied out to prop up the economic climate and that Germany and Europe had to return to fiscal self-discipline.

He extra that Germany’s constitutional financial debt brake, now suspended, would occur again into drive upcoming yr. That would imply a reduction in the degree of new borrowing from this year’s 140 billion euros ($146 billion) to just 10 billion euros.

($1 = .9591 euros)

Reporting by Christian Kraemer creating by Thomas Escritt Editing by Christoph Steitz

Our Requirements: The Thomson Reuters Trust Ideas.