German economy, the motor of Europe, stalls

Germany's agenda of spending more and rolling back structural reforms, along with a demographic squeeze, do not bode well for its economy.

After six weeks of coalition talks, Germany is finally about to form a new government. It wasn't worth the wait. The Grand Coalition agreement between the centre-left SPD and the centre-right CDU, likely to be ratified by SPD party members by 14 December, is a "leftish agenda that harks back to the era of Kraftwerk", says The Economist. The motor of Europe is in danger of stalling.

The agreement means that Germany is being "economically castrated", according to Wirtschaftswoche's editor Roland Tichy. It threatens to increase costs and red tape and undoes some of the helpful reforms of the past decade.

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