| If the recession continues, the German economy will fall into a real crisis. (Source: Euractiv) |
Germany has officially entered a technical recession after data showed Europe's largest economy shrank for two consecutive quarters.
Germany's gross domestic product (GDP) continued to decline by 0.3% in the first quarter of this year, after recording a 0.2% decline in the final quarter of last year.
The multifaceted impacts of the Covid-19 pandemic and the subsequent conflict in Ukraine are pushing the German economy to the brink of a serious crisis.
If the recession continues, Germany will fall into a real economic crisis. At that time, unemployment and insolvency rates will increase, goods will be stagnant, production will stagnate, the stock market and banks will collapse... All of which will create a nightmare scenario for Europe's leading economy.
Therefore, the most important task of the German government at this time is to prevent the economy from continuing to slide into recession and gradually control it to escape technical recession as soon as possible.
The government can immediately use the tools available at the moment, which are bailouts for companies and people through tax cuts and subsidies, as the German government did when dealing with the aftermath of the energy crisis a few months ago.
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