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Germany's Scholz Summons Top Ministers over Rival Plans to Fix Economy

FILE PHOTO: German Chancellor Olaf Scholz attends a press conference in Brussels, Belgium October 17, 2024. REUTERS/Johanna Geron/File Photo
FILE PHOTO: German Chancellor Olaf Scholz attends a press conference in Brussels, Belgium October 17, 2024. REUTERS/Johanna Geron/File Photo
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Germany's Scholz Summons Top Ministers over Rival Plans to Fix Economy

FILE PHOTO: German Chancellor Olaf Scholz attends a press conference in Brussels, Belgium October 17, 2024. REUTERS/Johanna Geron/File Photo
FILE PHOTO: German Chancellor Olaf Scholz attends a press conference in Brussels, Belgium October 17, 2024. REUTERS/Johanna Geron/File Photo

German Chancellor Olaf Scholz will hold meetings with his top two ministers to try to find common ground after they put forward contradictory plans to fix the nation's ailing economy, a government source told Reuters on Sunday.
A document leaked by Christian Lindner's finance ministry raised eyebrows in Berlin last week, with its push for tax cuts and fiscal discipline widely interpreted as a challenge to the multibillion-euro investment plan put forward by Economy Minister Robert Habeck just days earlier.
The stand-off is the latest escalation in a row over economic and industrial policy between the FDP, the Greens and Scholz's Social Democrats that has fuelled speculation of the coalition's potential collapse, less than a year before elections are due.
But a government source told Reuters that Scholz and the ministers would hold several meetings in the coming days, saying that "now that everyone has submitted their paper, we have to see how they fit with each other."
A worsening business outlook in Europe's largest economy has widened divisions in Scholz's ideologically disparate coalition over policy measures to drive growth, protect industrial jobs, and reinforce Germany’s position as a global industrial hub.
While Habeck wants the creation of a fund to stimulate investment and to get around Germany's strict fiscal spending rules, Lindner advocates tax cuts to spur the economy and an immediate halt on all new regulation.
SPD leader Lars Klingbeil signalled openness to discussing Lindner's proposals in a local newspaper interview, but said that some of them were untenable for his party, which released its own economic plan earlier in October.
"Giving more to the rich, letting employees work longer and sending them into retirement later - it will come as no surprise to anyone that we think this is the wrong approach," Klingbeil told the Augsburger Allgemeine newspaper.

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Egypt, IMF Hold New Discussions to Alleviate Citizens’ Financial Burdens

Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
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Egypt, IMF Hold New Discussions to Alleviate Citizens’ Financial Burdens

Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)

Egypt and the International Monetary Fund (IMF) have agreed to review their joint credit facilitation program to ensure that no additional burdens are placed on citizens.

Egyptian Prime Minister Mostafa Madbouly reiterated the government’s commitment to “maintaining a flexible exchange rate in coordination with the central bank to safeguard the progress achieved in this area.” He expressed hope that the meetings with the IMF delegation in the coming days would “conclude the fourth review of the economic reform program.”

Following a meeting on Sunday between President Abdel Fattah al-Sisi and IMF Managing Director Kristalina Georgieva in Cairo, the Egyptian Presidency announced that Georgieva expressed her “full understanding of the significant challenges Egypt faces amid regional and global developments.”

In March, Egypt signed an $8 billion extended financial support package with the IMF, which requires reducing subsidies on fuel, electricity, and essential goods and allowing the Egyptian pound to float.

In late October, Sisi warned that his government might need to reassess its program with the IMF if international institutions do not account for the extraordinary regional challenges the country is facing. He cited a nearly 60% drop in Suez Canal revenue due to security tensions in the Red Sea as an example.

During the meeting with Georgieva, Sisi expressed Egypt’s commitment to continuing its cooperation with the IMF, building on progress to boost economic stability and reduce inflation. However, he stressed the need to acknowledge recent challenges Egypt has faced due to regional and international crises, which have impacted foreign currency reserves and budget revenues.

Sisi reiterated that the government’s primary focus is on alleviating pressures on citizens, particularly by controlling inflation and curbing rising prices, while also continuing efforts to attract investments and empower the private sector to drive employment and growth.

Georgieva, in turn, commended Egypt’s recent efforts and the reform program being “carefully implemented with a focus on the most vulnerable.” She highlighted the progress in macroeconomic indicators despite unprecedented current challenges, noting that this has been reflected in positive assessments from international credit rating agencies, improved credit ratings, and increased investments.

She expressed her “full understanding of the significant challenges Egypt faces amid regional and global developments” and emphasized the IMF’s commitment to working with the Egyptian government to identify optimal reform paths.