GETTYGermany 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.”Related articles
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.”