Germany, annual GDP at -0.4%. The German crisis continues

Germany is the protagonist of the European markets today, with the third quarter GDP data having already clouded sentiment.
The German gross domestic product for the period July-September 2023 recorded a decline beyond expectations on an annual basis, with -0.4% indicating a worsening of the economic crisis.
Even on a quarterly basis, the figure was negative with -0.1% compared to the previous result of 0.0%.
The numbers reveal a still critical situation in Europe's leading power, now also grappling with budgetary problems after the Supreme Court ruling which blocked 60 billion euros.
The Scholz Government risks falling under the strong pressure of the various coalition parties, each eager to resolve the current impasse in a different way.
The liberals' spending rigor does not reconcile with the Greens' and SPD's push for spending and investments to relaunch the economy.
European stock markets could open sluggishly, also in the wake of yesterday's data which showed economic activity still contracting.
Meanwhile yesterday, the ECB minutes did not rule out further rate increases if necessary.
An even higher cost of money would be another brake on European growth.
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However, Germany is the nation that arouses concern and interest from analysts more than others.
Latest news reports that German Finance Minister Christian Lindner will propose a supplementary budget for this year that includes the suspension of limits on new loans, in a bid to ease the budget crisis caused by a court ruling.
A spokesperson for the Ministry of Finance explained that the executive will put forward the proposal to lift the debt brake, which limits Germany's structural budget deficit to the equivalent of 0.35% of gross domestic product, proposing that Parliament declare a “emergency situation” for 2023.
The majority of legislators must agree.
The move is a setback for Lindner, who had insisted on reinstating the debt brake this year.
The leader of the Free Democrats in fact considers himself the guardian of fiscal prudence in Chancellor Olaf Scholz's three-party coalition.
However, the budget stalemate forced him to take a different path.
read also The future of the Stability Pact is at stake on Germany's budget tricks Germany remains under the spotlight of investors and analysts.
2023 was a challenging year for Berlin from an economic point of view.
The aftermath of the war in Ukraine, skyrocketing inflation, energy crisis, industrial weakness, US-China tension and rethinking of trade policy are leaving their mark on the nation's economic system.
The imperative for Germany is to change and innovate the production system, with the public finances issue becoming a priority and problematic.