Germany close to facing ‘dangerous’ economic future as political chaos ...

MerkelGETTYGermany is reportedly on the brink of serious lasting damage to its economic model

The risk of a massive economic decline has prompted calls for change in direction by the European Central Bank (ECB).

Professor Clemens Fuest, head of the IFO Institute, has said: “It is very clear that monetary policy is too expansionary for Germany by any rule you care to use, but it is also too expansionary even for the rest of eurozone.

“We are seeing a strong acceleration everywhere. We think the ECB should be cutting asset purchases to zero by April.”

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However, the ECB has outlined it will cut bond purchases in half from €60bn to €30bn but stretch the programme until September 2018, and potentially beyond.

Professor Fuest added: “There is the danger of a real estate bubble in the bigger cities and it is not going to stop.

“The lesson of the past is that the longer this momentum goes on, the more dangerous it becomes, and I see a lot of dangers.”

Angela Merkel in picturesTue, August 8, 2017 Angela Merkel has served as German Chancellor since 2005 and Leader of the Christian Democratic Union since 2000. We take a look at her political career in pictures.
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