A leading German economic advisor is cautioning about the potential for further economic decline in Germany. Veronika Grimm, a member of the German Council of Economic Experts and a supervisory board member at Siemens Energy, expressed concerns regarding the country’s economic outlook for 2025.
In remarks published Saturday, Grimm stated she doesn’t anticipate a significantly positive trajectory, suggesting Germany could potentially slip further into recession if conditions worsen. She highlighted a considerable degree of uncertainty, particularly surrounding the implications of ongoing global trade disputes. The Council of Economic Experts currently projects 0.0% growth for the current year and 1.0% for the coming year.
Regarding recently imposed U.S. tariffs, Grimm indicated that the current levels are manageable, though she anticipates potential complications. She noted that U.S. President Trump routinely engages in negotiations and disputes with various nations and that a re-opening of trade discussions with European countries remains a possibility, with an uncertain outcome. While expecting a negative effect on Europe, Grimm believes the current tariff rate of 15% will not cause a dramatic downturn.
Grimm characterized the recent agreement between EU Commission President Ursula von der Leyen and President Trump as a reflection of the current balance of power. She stressed the need for proactive measures to bolster European growth potential, advocating for deregulation, increased investment in research, greater labor market flexibility and a reduction in corporate taxes.
