Europe’s largest economy has shrunk slightly for the past two years in a row. High energy prices, green transformation and demographic changes have put the export sector under certain pressure, adding that high taxes and an increase in bureaucracy have made the situation worse.
“Smart, consistent, reliable economic policymaking can unleash a sense of change and increase motivation for greater investment,” Nagel said.
Elsewhere, Nagel said that after five cuts in the last eight months, which saw five cuts fall from a record 4% to 2.75%, the European Central Bank said. They tried to downplay speculation about whether interest rates could be reduced quickly.
“In the current uncertain environment, there is nothing we can get from publicly speculating about where we stand in the summer or the end of the year, in terms of interest rate policy,” he warned.
Nagel was speaking at a press conference to present his 2024 Bundesbank annual report. Nagel said the losses will still last for several years, but they should be narrowed from now on.
