Moritz Schularick, President of the Kiel Institute for the World Economy (IfW Kiel), believes that Germany will likely be pushed further into a crisis by the incoming US President, Donald Trump.
“What we have seen since the election makes it likely that the next four years will be very challenging” the economist told the news magazine “Focus”. “And already, many people assume that it might not be as bad as expected in the end.”
According to Schularick, Trump’s method involves “first making a loud noise, demanding the impossible, and then shifting the discussion in his direction. He moves the playing field, and others start thinking about how to accommodate him.” Trump’s “radical statements” on higher NATO contributions from member states, for instance, may have a valid core to them.
The current military spending of two percent of a country’s gross domestic product, Schularick said, is “a relic of the past. One should not pretend it is still realistic.” The former Vice-Chancellor Robert Habeck, who suggested a defense spending of 3.5 percent, was on the right track, Schularick noted, as “all serious expert estimates for the actual needs of the next decade lie in the range of three to four percent.” The threat landscape has simply “deteriorated significantly” Schularick emphasized.