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New Germany’s government will cut costs or increase investment

In the run-up to the election, people in the German city of Berlin have been protesting for low-cost housing. They complained that the number of homeless people is increasing in the country due to government policies. In the last five years, rents in Berlin have risen by 40 percent. However, this problem is not limited to the city of Berlin, it has spread throughout the country.

Naturally, all the political parties like themselves have made various promises in the election manifesto to solve this housing problem. But the problem is not just housing, Angela Merkel’s successor will have to deal with many more socioeconomic problems. That is why the interest of the world community in the results of the German election held today is endless.

Angela Merkel has been the Chancellor of Germany for the last 18 years. He has dealt with major crises  the financial crisis, the eurozone’s high debt crisis, the migration crisis caused by the war in Syria, and the epidemic that has been raging for two years now. Any one of these crises could lead to the downfall of any government. In that sense, it is possible Merkel handled the situation quite well. Under his rule, employment in Germany fell and the economy expanded by 34 percent, the highest among EU countries.

But the accusation against Angela Merkel is that she did not have the vision that she should have given to the nation in order to advance this success. Experts say inequality has increased in German society at this time. In addition, they have become dependent on the export of goods to China. Above all, there are allegations against Merkel for not investing enough in digitalization, evolving technology and renewable energy. 

Germany is far ahead in heavy industry. That is why Germany is the largest emitter of carbon in the European Union. Experts say Germany needs to invest at least 54 trillion in technological advances to reduce carbon emissions to zero by 2045.
This is the main challenge. To invest this amount, the government has to increase its income or borrow. But in the last year and a half, the German government has taken a loan to deal with the epidemic. Now, before the election, both the Conservative and Social Democrats have pledged to pull the reins of debt again. As a result, the main challenge for those who will win today’s election will be to rein in debt and ensure the necessary investment at the same time.

The leaders have promised that the country will come out of this trend by 2023. German economist Kirsten Brajesky tweeted that on the one hand there is a desire for structural change. This requires huge investment. On the other hand, there is talk of pulling the budget rush or curbing debt. As a result, the matter is becoming more and more like asking for a groom. If leaders are honest with the people, they should talk about the financial cost of this change. In addition, to decide whether the policy of austerity is appropriate or not.

Germany provides one-fourth of the European Union’s GDP. That’s why analysts say today’s election is crucial for Germany. The Social Democratic Party is ahead in opinion polls. They, however, are in favor of maintaining Merkel’s continuity.

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