Merkel Ignoring Risks in Feel-Good Economy, DIW Head Says

Chancellor Angela Merkel’s government is ignoring risks to Germany’s economic health and making a mistake by balancing the budget as the economy cools, Marcel Fratzscher, head of the DIW economic institute, said.

Germany’s economic strength relative to other euro-area members is giving the chancellor and her Social Democrat coalition partner a false sense of security, Fratzscher said in an interview. Merkel, whom Germans re-elected to a third term last year, has focused since then on redistributing wealth rather than pursuing pro-business policies, he said.