August 13, 2019 / 2:33 PM / a month ago

Merkel: No need for fiscal stimulus package right now

German Chancellor Angela Merkel speaks during a ceremony to mark the 75th anniversary at the site where a group of officers led by Claus Schenk Graf von Stauffenberg was shot after their failed July 20, 1944 attempt on the life of Adolf Hitler, in the "Bendlerblock" building in Berlin, Germany, July 20, 2019. REUTERS/Fabrizio Bensch

STRALSUND, Germany (Reuters) - German Chancellor Angela Merkel said on Tuesday she did not see any need for a fiscal stimulus package to counter the effects of a slowing economy, but she added that Berlin would continue to pursue a high level of public investment.

“There is a need for a continued level of investments,” Merkel said during a panel discussion in the Baltic See town of Stralsund. The government’s decision to abolish an income tax surcharge for most employees from 2021 would help support domestic demand and with it overall growth, Merkel said.

The problem regarding public spending in Germany is not the level or timing of state investments, but rather bottlenecks such as skilled labor shortages and relatively long and slow planning processes, Merkel added.

Reporting by Michael Nienaber; Editing by Peter Graff

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