Volker Wieland and Council of Economic Experts ask for re-adjustment of economic policy

Volker Wieland and his fellow members of the German Council of Economic Experts have asked the future German government to take advantage of the good economic situation in order to re-adjust economic policy. While presenting the annual report 2017/18 to Chancellor Angela Merkel in Berlin, the Council urged to concentrate on the future challenges due to globalization, demographic change, and digitalization.

For this year, the Council expects the real gross domestic product in Germany to grow by 2.0 percent. For 2018, the Council expects 2.2 percent. The German economy faces a risk of overheating, the experts warned. For the euro area, the GCCE forecasts real growth of 2.3 percent in 2017 and 2.1 percent in 2018.

In its annual report entitled "Towards a forward-looking economic policy", the Council asked the next government for a reform of the income tax, which should be used to return the increase in tax revenue from bracket creep, coordinated with the gradual abolition of the solidarity surcharge. According to the Council, the unemployment insurance contribution rate could be lowered by up to 0.5 percentage points.

In view of the macroeconomic development in the euro area, Wieland asked the European Central Bank (ECB) for a turnaround in monetary policy. "The ECB should communicate a strategy for the normalization of its monetary policy", Wieland said. The end of the bond-buying program would not mean a tightening of monetary policy, which was still too expansionary.  

The German Council of Economic Experts is an independent academic body advising German policy makers on questions of economic policy. It consists of five members, currently Prof. Dr. Christoph M. Schmidt, Prof. Dr. Peter Bofinger, Prof. Dr. Lars P. Feld, Prof. Dr. Isabel Schnabel and Prof. Volker Wieland, Ph.D.

Press release of the GCEE (PDF)
Executive summary of the annual report 2017/18 "Towards a forward-looking economic policy" (PDF)
Chancellor Angela Merkel on the annual report (article)
Press conference of the GCEE (Video)

The annual report in the media (selected articles):
ARD-"Tagesschau" (Video)
ZDF-"heute-Nachrichten" (Video)

Bloomberg News: "Brexit should be prevented, German government advisors say"
Reuters: "German advisors want tighter ECB policy, longer Brexit talks"
Financial Times: "German economy faces risk of overheating, experts warn"

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FAZ/Reuters-Video: "Wirtschaftsweise heben Wachstumsprognosen an"
FAZ: "Wirtschaftsweise für Abschaffung des Soli und weniger Arbeitslosenbeitrag"