Germany should consider fiscal expansion, French and German governors say
But Bundesbank's Weidmann warns against pro-cyclical impact of “debt-financed public spending”
The governors of the French and German central banks have both said Germany’s government should consider boosting public investment.
There is “currently some financial leeway” for expanded government spending, Jens Weidmann, president of the Deutsche Bundesbank, told an audience in Hamburg on January 30. Programmes should aim to encourage more investment by businesses, he said, perhaps by improving Germany’s digital infrastructure or its adoption of new energy sources.
But “it would be wrong
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