Politics

Germany CRISIS: Economist ‘more worried about Germany than Italy’ as economy ‘vulnerable'


Samy Chaar, chief economist of renowned private bank Lombard Odier, said he fears German Eurosceptics have the power to destroy the EU more than Italy does, due to it being the biggest funder of the bloc. Mr Chaar said should an anti-establishment Germany elect a leader with the same mindset, or even follow Britain’s Brexit lead, the EU would be finished. Speaking to German publication Watson, he was asked his thoughts on Italy being a “timing time bomb”.

He replied: “Honestly, I’m more worried about Germany than about Italy.”

He added: “Europe needs Germany more than ever, a strong Germany, and a Germany ready to carry out reforms. The French want that, the Germans show them the cold shoulder. If we do not reform Europe, the Eurosceptics will take over – and destroy the EU.”

The German interviewer appears to take offence at this, and persists: “But again: The German economy is buzzing.”

Mr Chaar added: “The German economy is very vulnerable. It has benefited from globalisation, but globalisation is on the decline. The auto industry is the crucial part of the German economic miracle.

However, it is very price sensitive. That’s why Germans need alternatives. They need to expand the services sector and they need to boost the domestic economy.”

Again, the interviewer appears to refuse to accept this, and argues: “That’s what economists around the world have been preaching for decades, but to no avail.”

Mr Chaar said: “Unfortunately, the Germans are firmly convinced that they have found the right economic model. And they are also firmly convinced that everyone in Europe should emulate them. But last year, the German economy has almost slipped into recession.

“And still the sword of Damocles of punitive tariffs hangs over the car industry. At some point, the Germans will also have to realise that they have to change something.”

The comments come as German Chancellor Angela Merkel announced she will step down in 2021.

Initially, she had challenged French President Emanuel Macron for Jean-Claude Juncker’s role of President of the European Commission, as he will be stepping down later this year.

But her plans have recently changed, with her nominating German politician Manfred Weber for the position, infuriating Mr Macron.

Mrs Merkel was again spotted violently shaking on a stage she shared with German President Frank Walter days ago, sparking more concerns for her health.

Concerning video footage shows Mrs Merkel, 64, crossing her arms as if to steady herself and shaking uncontrollably before being offered a glass of water.

Additional reporting by Monika Palenberg.



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