Policy Punchline

Michael Hüther is the director of the German Economic Institute (Institut der deutschen Wirtschaft), one of the most important think tanks in Germany based in Cologne. He previously served on the German Council of Economic Experts and was the chief economist of DekaBank. In this interview, Dr. Hüther discusses Covid’s shock on the German economy, why globalization has become “exhausted,” Germany’s “Golden Decade” in early 2000s and its implications for public investments and debt, and future of European integration. The last decade was the Golden Decade for Germany. 80%+ people were integrated into the labor market; employment rate consistently went up; the government held a balanced budget… But in some sense, it was also the “Lost Decade” for public investment. The debt break introduced to the Constitution in 2009 forced Germany to maintain a balanced budget, which has been in part achieved through reducing investments in local communities and the greater economy. With Covid-19’s impacts, the deficits in