Christine Lagarde, President of the European Central Bank, stated that Germany's planned boost in defense and infrastructure spending could stimulate both economic growth and inflation. The proposal from Germany's next chancellor Friedrich Merz aims to secure billions in new borrowing, pending parliamentary support. Meanwhile, Thyssenkrupp has announced a significant reduction in jobs within its automotive sector due to ongoing industry challenges. These developments highlight the complex dynamics of fiscal policy and industrial pressures in Europe.
"An increase in defence and infrastructure spending could also add to growth," Lagarde said, adding that it "could also raise inflation through its effect on aggregate demand."
The job losses would be accompanied by cuts in investment intended to save €150 million, Thyssenkrupp said, as it faces pressures from global automotive market changes.
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