Federal Minister of Germany for Finance Olaf Scholz played down warnings about the performance of Europe's biggest economy, Germany, denying the need for specific measures to stimulate economic growth.
"Solving artificial crisis, such as trade tensions and the Brexit, will help boost growth by the end of this year," Scholz told Bloomberg on Thursday.
He pointed out that trade tensions between the US and China are harming on exports, particularly the auto industry, which is struggling to cope with speedy advancements in the sector.
"We are not in a position that makes it necessary to act as if we are in a crisis," Scholz said.
The European Central Bank (ECB) said today that interest rates will remain at current levels or a little lower until at least the first half of 2020.
ECB President Mario Draghi said that manufacturing in Europe and Germany, in particular, is sustaining an 'idiosyncratic shock', which requires government spending to boost it up.
Economic data showed yesterday that the German industrial activity fell to a seven-year low this July.
Angela Merkel's government is currently adopting major tax cuts and infrastructure spending. However, Lower taxes could lead to higher spending and investment, as well as higher imports.
The finance minister noted that stimulus packages are not a smart idea, citing high operating rates and public investment.
"Increased spending would lead to higher prices rather than boost economic growth," he added.
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