Ifo President Fuest warns of economic disadvantages caused by populist parties in East Germany

A prominent economist confirms that the AfD, the Left and the BSW are a locational disadvantage for the East. Fuest's biting comment: The voters have a right to choose decline.

The AfD's election victory in Saxony-Anhalt will harm the state economically, says Ifo President Fuest. (Archive image) Photo: Peter Kneffel/dpa

Munich. Ifo President Clemens Fuest sees the strength of populist parties as a danger of economic decline for East Germany. “In the eastern German states, parties like BSW, Left and AfD currently have majorities,” Fuest told Capital magazine. "Governments against them are no longer possible. This is a location disadvantage." At the same time, the prominent economist emphasized: “In a democracy, voters also have the right to choose economic decline.”

Fuest predicted declining business investment in regions where populist parties pursue economically unreasonable policies. “If there is a high risk that parties will come to government in a region that create poor conditions for entrepreneurial activity, then investments will decline,” said the Ifo President.

Fuest did not only refer to regions with high AfD election results, but to all regions with high support for radical parties.

The economist complained about the lack of consequences for bad policies in the state financial equalization: If a federal state gets into economic difficulties, a significant part of the costs would be passed on to the federal community, said Fuest about the state financial equalization. “This has been a problem for a long time,” said the scientist, referring to Bremen and Saarland, two heavily indebted western federal states.

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