At the World Economic Forum in Davos, the head of the International Monetary Fund (IMF), Kristalina Georgiewa, painted a bleak picture for Germany. The reason: The country is still dependent on Russian gas.

After the corona pandemic, the German economy is only recovering slowly. According to the International Monetary Fund (IMF), the war in Ukraine and the disruptions in global supply chains are the reason for Germany’s slow economic recovery. High energy prices are also causing inflation rates to rise to their highest levels in decades. This is what the IMF writes in a report published on Monday.

The recovery is expected to gain some momentum only in 2023, if energy supplies remain secure, supply shortages ease and new coronavirus-related restrictions are avoided.

“Germany has a problem,” says IMF boss Kristalina Georgieva in the “Spiegel” interview, “because it cannot quickly free itself from its dependence on Russian gas imports.” Despite the forecasts, the effects are uncertain but significant. Some economists are forecasting an economic contraction of up to six percent for Germany if Russia suddenly stops gas supplies. Georgieva advises carefully considering how the fiscal leeway is used.

Finance Minister Christian Lindner already has plans on how to deal with this. He advises EU countries not to use a suspension of debt rules for 2023 proposed by the EU Commission. “You can become dependent on national debt and we have to end the addiction to more and more debt as quickly as possible,” said Lindner on the sidelines of a meeting of the finance and economics ministers of the euro countries on Monday.

Lindner therefore has concrete plans for Germany: “Germany will return to the debt brake of our Basic Law next year.”

In its base scenario, the IMF assumes a weak upswing, but also sees risks. In 2022, the IMF expects economic growth of around 2 percent. In 2023, gross domestic product (GDP) growth should therefore be slightly above 2 percent.

Georgieva therefore sees a realistic chance of implementing Lindner’s plans, but only under one condition: “If energy prices continue to fall, the goal of the debt brake is realistic.” Germany is currently striving to reduce some support measures that should work against the corona crisis. In addition, the aid for the high energy prices is not planned for the long term.

But how should Lindner’s plans be dealt with when energy prices rise? The head of the IMF then advises further supporting the economy and reconsidering and postponing the return to the debt brake.

According to the IMF, inflation should be around 6.5 percent in 2022 and weaken to around 3.5 percent in 2023. “However, growth could be weaker and inflation higher than the baseline scenario,” the IMF said in Monday’s report. “The greatest threat is a permanent and complete cessation of Russian gas exports to Germany and Europe.” It would therefore take at least two years to completely replace the missing supplies in Germany.