Can a drifting into a new economic and financial crisis be averted?

The latest economic data and forecasts point to a return of the recession. Can a drifting into a new economic and financial crisis be prevented? Sebastian Watzka, Ludwig-Maximilian University of Munich, believes that with energetic and credible action by policymakers the existing recession in the euro area can be ended while at the same time supporting the robust German economy. In his view, at least two kinds of “stabilising and stimulating demand policy measures” can be used: investment in promising projects, such as renewable energy, education and transport, and a slight increase of the ECB’s inflation target. For Friedrich Thiessen, Technical University of Chemnitz, the unsustainability of current policy is leading to a gradual worsening of the crisis.