Germany's Leader Tackles Budget Crisis and Economic Woes

Germany's Chancellor Olaf Scholz has promised to address the country's budget crisis caused by a court ruling that struck down billions in planned spending. However, he provided few details on how he plans to promote clean energy and modernize the struggling economy. The cuts that need to be made next year could further slow down the already worst-performing major economy. Scholz's coalition government lacks the majority to loosen debt limits, which restrict the government's response to new challenges. Economists warn that spending cuts will add to the challenges facing Germany, including the impact of Russia's natural gas cutoff. The government will have to scramble to cover shortfalls in the budget, and spending may be reduced by as much as 0.5% of annual economic output for the next two years. Germany's economy is projected to be the worst-performing major economy this year, and prospects for next year are not much better.