(new: updated throughout)

JENA/ERFURT (dpa-AFX) - It's bad news. The German economy is not getting off the ground this year either. The German government expects only a mini-growth of 0.2 percent. Economics Minister Robert Habeck (Greens) called this "dramatically bad", Finance Minister Christian Lindner (FDP) even called it "embarrassing and socially dangerous". But what now? The gloomy economic outlook is increasing the pressure on the federal government.

And the farmers' protests continue. When Habeck visited Floh-Seligenthal in Thuringia on Thursday, demonstrators with tractors blocked an access route to a factory belonging to nougat manufacturer Viba - Habeck arrived there by a different route, however, and visited the factory. Placards read: "Too much is too much" or "Traffic lights are ruining agriculture". There have been protests across Germany for weeks because the federal government wants to cut tax breaks for agricultural diesel.

No rapid economic recovery in sight

Last year, the German economy slipped into recession. There is no improvement in sight for the time being. At the start of a three-day tour of Saxony, Thuringia and Bavaria, Habeck announced on Wednesday at a trade fair in Leipzig that the German government would be significantly lowering its economic forecast for this year - Habeck will be presenting the annual economic report next week. In the fall forecast, the government had still assumed growth of 1.3 percent for the current year.

FDP leader Lindner said on Wednesday evening at the political Ash Wednesday of the Brandenburg FDP in Potsdam that with a growth forecast of 0.2 percent, Germany was once again in the bottom group of developed economies.

Habeck wants to release the brakes

On Thursday, Habeck visited the Jenoptik technology group in Jena. He said that growth of 0.2 percent was "by no means satisfactory". With a view to the weak global economy, the minister said that not all problems would be solved, but that "homework" had to be done - and growth stimuli had to be provided. "The economic situation is multifaceted, but it is a very clear mandate as to what we need to do." Habeck mentioned a faster reduction in bureaucracy and, in view of the large number of vacancies, faster placement of people in the job market. The shortage of skilled workers is a brake on growth.

More money from the state?

Habeck said that he receives many inquiries from companies that would like to build a factory in Germany - but they tell him that they need the same conditions as in the USA. The USA attracts companies with massive incentives from state subsidies. Germany has decided to spend money more restrictively. "If there is more money, then there is no one who is happier than me."

Habeck had brought a billion-euro, debt-financed special fund into play in order to finance tax relief for companies and stimulate the economy. The FDP, however, insists on adhering to the debt brake and rejects tax increases. And the SPD is unlikely to go along with cuts to social benefits.

Habeck and Lindner actually agree in their analysis: Germany's companies are in danger of no longer being competitive internationally due to a high tax burden in international comparison or high energy costs. However, the countermeasures are controversial. In Leipzig, Habeck said, without naming the FDP: He believed it was the moment when everyone had to leave their "favorite places". The background to this is also the fact that a planned growth package in the mediation process with the federal states is much smaller than originally planned.

Lindner wants a "dynamization package" with broad-based relief for companies, for example in the labour market, energy prices, bureaucracy and taxes. He proposed completely abolishing the solidarity surcharge. However, this is controversial among the SPD and Greens.

FDP parliamentary deputy Christoph Meyer said on Thursday: "Crippling bureaucracy, high electricity prices, an overwhelming tax and duty burden and too little digitalization cannot simply be subsidized away. Each of these issues must be tackled with concrete measures." Unfortunately, Habeck's ideas were heading in the direction of an economy on a "state-financed subsidy drip". That doesn't have much to do with a market economy. Habeck should rather make proposals to the coalition partners that can be agreed upon.

Industry urges government to act

Dieter Bauhaus, President of the Erfurt Chamber of Industry and Commerce, said after a discussion between entrepreneurs and Habeck: "One of our basic problems is that we have the impression that the economy is not being listened to enough."

"The government has no better alternative than to hit the ground running," said Martin Wansleben, Managing Director of the German Chamber of Industry and Commerce, in Berlin. "The crisis is here." The poor framework conditions and the frustration of companies were depressing domestic investment plans. What is needed is a strong signal of new beginnings and reliable, business-friendly framework conditions in the long term.

Warning against the AfD

The traffic light does not have much time left. The new state parliaments in Saxony, Thuringia and Brandenburg will be elected in September, and there is a threat of AfD election victories. In Erfurt, Habeck warned that a country that wants to prosper economically must be open - open to exchange, to trade in goods and to people who work here - and it must not send out signals "that people who are not called Meier, Müller or Habeck are not welcome here. Apart from everything else concerning values, norms and moral standards: that destroys prosperity."/bz/DP/men