Chancellor Angela Merkel and Finance Minister Olaf Scholz brushed aside demands by both unions and businesses On Monday to ditch the balanced budget policy as the economy is slowing down. Germany’s BDI business lobby and DBG union are calling for an end to the so-called “black zero” policy of no net new borrowing. Instead, they are calling for public investment in infrastructure, taking advantage of negative bond-yields.


The BDI is calling for €17bn investment in digital and transportation infrastructure, which corresponds to 0,5% of GDP, on the top of €43bn earmarked for public investments in 2020.

The rare social partners’ joint call comes as Germany narrowly avoided a technical recession in the third quarter of 2019 posting 0,1% growth. Growth in Europe’s biggest economy will remain weak in the fourth quarter the Bundesbank said on Monday.

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