Is Germany wise to keep its national debt so low?

While the rest of the world is playing black jack, Germany is staying at home to do its homework.

Photo by Alice Pasqual on Unsplash

Dear Reader,

When IMF boss Kristalina Georgieva took to the stage in Washington last week ahead of the fund’s annual meeting, her diagnosis of the health of the global economy held good and bad news for Germany.

Deutschland AG’s economic success over the past two decades has been based on foreign demand for its goods. For a long time, growing markets in the Far East were hungry for German cars and machines.

But Georgieva cautioned that the era of open markets is coming to an end.

“Going forward, trade will not be the same engine of growth as it was before,” she said. “This is the fracturing that I warned of on this stage in 2019 - except that it is worse.”

That Germany is particularly sensitive to such changes in the global weather was affirmed by the IMF this week, when it lowered its growth forecasts for Germany down to zero for this year and 0.8 percent for 2025.

Global demand for Made in Germany is sinking: that is one of the major reasons that the coun…