A prominent German economic advisor has cautioned that Germany could face a further economic downturn in 2025. Veronika Grimm, a member of the German Council of Economic Experts and a supervisory board member at Siemens Energy, expressed concerns about a potential relapse into recession, speaking to the Funke Media Group newspapers. While the Council currently projects 0.0% growth for the current year and 1.0% for the upcoming year, Grimm highlighted significant uncertainties surrounding the global economic landscape.
Grimm assessed that the current level of US tariffs is manageable, but acknowledged the volatile nature of international trade relations under the current US administration. She noted the possibility of renewed trade discussions between the US and Europe, the outcome of which remains unclear. She anticipates a negative impact on Europe, though not drastically severe at the current tariff rate of 15%.
The recent agreement reached between European Commission President Ursula von der Leyen and the US President, according to Grimm, reflects the existing balance of power. She urged a proactive approach focused on strengthening Europe’s growth potential through deregulation, increased investment in research, greater labour market flexibility and reductions in corporate taxes, rather than lamenting current circumstances.