Economics and politics - comment and analysis

An interview with Heiner Flassbeck on deflation and the eurozone

Andrew Brady interviewed Heiner Flassbeck two days ago. Heiner speaks about the measures of the ECB to introduce negative interest rates and bank deposit rates. Growth remains anemic in the EU. This is partially due to the low purchasing power of European workers, including Germany. The impacts of the Germany minimum wage (set at € 8.50 on 1 January 2015) are also discussed. The minimum wage did not have a detrimental impact on jobs and many more employees were covered by social security in October 2015 than in the October 2014. However, Flassbeck argues that it remains insufficient. Wage growth need to be higher because this is the way to increase demand. Without it, the European economy cannot return to growth.

The video can be watched here.