It means the German government is simultaneously in a very strong financial position but dangerously constrained on what it can do with its money, says Holger Schmieding, chief economist at Berenberg bank.

“Germany has much more fiscal headroom than almost any other country – it just doesn’t allow itself to use it. Our debt is low, our deficit is reasonable. Our debt is, if anything, declining as a share of GDP,” he says.

“Yet we are stuck with a debt…