The recovery of the German economy is being delayed by uncertainty surrounding international trade policy. Only gradually will economic activity be boosted by fiscal measures. The German economy will continue to tread water in the current year.

At a meeting of the G7 finance ministers and central bank governors, Bundesbank President Joachim Nagel addressed the geopolitical challenges currently being faced. Speaking at a joint press conference with the new Federal Minister of Finance Lars Klingbeil in Banff, Canada, Mr Nagel said that while global economic activity had still been fairly robust at the start of the year, benefiting from the anticipatory effects of announced tariffs, the world economy was now struggling in the face of tightened US tariff policies and great uncertainty.

In a joint interview published by the Süddeutsche Zeitung of Germany and El Mundo of Spain, Bundesbank President Joachim Nagel and Banco de España Governor José Luis Escrivá discussed the impact of current US policy on the global economy, ECB Governing Council decisions and Germany’s role in the EU. “The new German government has to contribute actively to the further development of the EU and Europe. And I agree with José Luis Escrivá that Germany has to play its part in leading the EU,” Nagel said.