Germany elections will enter the new leadership – but it may not change its economy

The struggling German economy was a major discussion point between the critics of the government of Chancellor Olaf Schools during the last electoral campaign – but analysts warn that the new leadership may not manage this tide.

While voters are preparing to go to opinion polls, Germany will soon get a new advisor. Friedrich Mirz of the Christian Democratic Union is the favorite of the company.

Mirz did not move away from the bombing of Schulz’s economic policies and those who linked them to the largest economy in the state of faded Europe. He argues that the government under his leadership will give the economy the lawsuit it needs.

Experts speaking to CNBC were less confident.

“There is a great danger that Germany will get an economic model that has been renewed after the elections, but not a new model that makes the competition jealous,” Carsten Barzeeski, Macro’s global president in Engy, told CNBC.

Germany’s gross domestic product decreased in 2023 and 2024. The recent quarterly growth readings were oscillating on the edge of the artistic recession, which has been avoided so far. The German economy decreased by 0.2 % in the fourth quarter, compared to the previous three expansion, according to the latest reading.

The largest economy in Europe faces pressure in major industries such as the auto sector, infrastructure issues such as the country’s rail network and home building crisis.

Dany-knedlik also reported the so-called debt brake, a long-term financial base that was devoted to the German constitution, which limits the size of the structural budget deficit and the amount of debt that the government can take.

Whether or not, it should be a large part of the financial debate before the elections. While CDU does not want to change the debt brakes perfectly, Mirz has said he might be open to some repairs.

“To significantly increase growth prospects without increasing debt, it seems somewhat unlikely,” said Dany-Knedlik of Diw.

“Keep in mind that the goal of growth by 2 percent must be reached during a 4 -year legislative period, the 2030 agenda in conjunction with the position of conservatives towards the debt break for me reads a list of desires more than the straight economic growth program forward, she said.”

Franziska Palmas, an economist in Capital Economics, sees some benefits for CDU-CSU’s plans, saying they are “likely to be” positive “for the economy, but they warn that the resulting support will be small.

“The tax cuts will support spending on consumers and private investment, but weak feelings mean that consumers may provide a large share of their additional income after taxes and companies may have hesitated in investment.”

However, Palmas indicated that not everyone will come out of the winner of the new policies. The tax cuts of income in middle -income families will benefit more than those with low income, which will also be affected by the potential discounts of social benefits.