OECD: German budget crisis could slow down EU economy

BERLIN (Reuters) – The Organisation for Economic Cooperation and Development (OECD) warned on Thursday that Germany’s budget crisis, which has called into question billions of euros in planned spending, could hamper the European economy over the next few years.

“If there is less investment and spending in Germany over the next few years because there is less money available, this will inevitably have an impact on the EU economy,” Robert Grundke, the head of the OECD’s Germany desk, told Reuters.

As a result, Germany would import fewer intermediate goods and fewer final goods and services from the European Union.

A court ruling last week blew a 60 billion euro ($65.44 billion) hole in the finances of Europe’s largest economy, leaving the German government scrambling to find a way forward.

“The uncertainty about future fiscal policy is already having a negative impact on companies’ investment activity and the consumer behaviour of households in Germany,” added Grundke.

Germany’s steel sector on Thursday voiced concerns shared by many companies about what would now happen to funds promised by the government for the country’s industrial transformation.

($1 = 0.9168 euros)

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