Economic Challenges in the Years Ahead and the Need for Economic Policy Action

A new Bundestag will be elected in Germany in September 2021. The next government faces major tasks. In the area of economic and financial policy, these include overcoming the economic consequences of the Coronavirus crisis as well as tackling challenges that already existed before the crisis but were in part exacerbated by it. ifo Institute experts outline the ten key challenges for Germany and suggest how to address them. For example, policymakers should focus on improving the conditions for labor force participation and investment, increasing productivity through more education, and improving equal opportunities. Climate policy should focus on the carbon price. Fiscal policy should promote economic recovery but maintain debt rules. At the European and international level, Germany should counter increasing protectionism.