The Chief Investment Officer of Allianz, Ludovic Subran, a Harvard economist, has expressed strong criticism of Germany’s economic policy.
Subran told the Süddeutsche Zeitung that one of the major issues is the debt brake, which he considers a “failed experiment” that hinders the implementation of necessary reforms with state budgetary means. “It’s like trying to conduct an orchestra with one arm” he said.
He also attributed the country’s woes to low productivity growth and a high savings rate. Wealthy German private households would rather invest in US-based ETFs, such as the MSCI World, than finance the necessary structural changes in the economy. Germany, according to Subran, is heading in the direction of Argentina’s economic crisis and the blame lies with a policy that fails to provide similar domestic investment opportunities. Germany, he said, must clearly define its role in the European Union. On key issues like climate, finance and technology, the largest European economy must take the lead: “We all sink or swim together” Subran emphasized.