Title: Finance Ministers Call for Debt Brake Reform Commission
In a guest article published in the "Tagesspiegel," Baden-Württemberg's Finance Minister Daniel Bayaz (Greens) and Berlin's Finance Senator Stefan Evers (CDU) have advocated for a reform commission to further enhance the debt brake. This commission would comprise representatives from federal and state governments, along with academia, to bolster the debt brake's effectiveness.
Evers and Bayaz suggest an investment rule as a potential component of the debt brake reform. This new rule would facilitate credit financing for additional investments, particularly in addressing the challenges associated with transformation. They emphasize that a new exception to the debt rule should not translate into increased leeway for non-targeted expenditures; instead, the concept of investment should remain politically neutral.
Both politicians argue that Germany's federal states require more room for debt. They propose a debt level of 0.15% of the GDP as a feasible option for the federal states, allowing them the necessary leeway to address critical state policies such as education more effectively. This newfound flexibility could prove particularly beneficial, considering the current budget chaos at the federal level.
In response to this possible reform initiative, some politicians, such as Bavaria's Finance Minister Albert Füracker (CSU), countered the initiatives from Berlin and Stuttgart. Füracker underscores the importance of bolstering the economy and fostering growth to secure higher tax revenues, thereby providing the necessary scope for action.
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Insights
- The debt brake reform proposal involves allowing for higher levels of investment and potentially elevated debt levels.
- Key politicians' opinions on the issue include:
- Chancellor Olaf Scholz advocates for more debt, claiming that other strong economies have higher national debts.
- Economy Minister Robert Habeck (and leading chancellor candidate for the Greens) supports boosting investment expenditures.
- Friedrich Merz, a CDU/CSU leading candidate, supports reforms but emphasizes saving, economic growth, and reducing subsidies.
- SPD and Greens advocate for moderate reforms, allowing Berlin to raise more debt to fund higher investment spending.
- The FDP and AfD are against debt brake reform, maintaining fiscal discipline over loosening spending rules.
- Majority public opinion favors reforming or even abolishing the debt brake, according to a recent poll by Forsa.
## Rewritten Article
In a recent guest article published in the "Tagesspiegel," Finance Minister Daniel Bayaz (Greens) from Baden-Württemberg and Finance Senator Stefan Evers (CDU) of Berlin have called for a reform commission to further advance the debt brake. This commission, they believe, should comprise representatives from the federal and state governments and academic institutions to create a more robust debt brake structure.
Evers and Bayaz propose an investment rule as a concept within the debt brake reform. This rule would enable credit financing for additional investments, assisting in addressing challenges associated with transformation. They stress that using the debt rule's new exception for non-targeted expenditures must be prevented, protecting the neutral concept of investment.
The two politicians argue that federal states require an expanded degree of financial freedom. They envision a debt level of 0.15% of their GDP as a possibility, enabling the federal states to address critical policy matters, such as education, more effectively due to the available leeway.
Notably, in response to this reform initiative, some politicians, like Bavaria's Finance Minister Albert Füracker (CSU), have conveyed their opposition. Füracker underscores the need to fortify the economy and foster growth, fostering higher tax revenues, thereby providing the vital scope for action.
Related Articles
Insights
- Evers and Bayaz's proposed reform would introduce an investment rule as a mechanism within the debt brake, allowing credit financing for additional investments to address transformation challenges.
- Most politicians in Germany have varying opinions on the debt brake reform, including:
- Chancellor Olaf Scholz, who supports reforms and higher debt levels, arguing that other strong economies maintain national debts significantly higher than Germany's.
- Economy Minister Robert Habeck (Greens) and Green chancellor candidate, who share a belief that Germany needs to increase investment expenditures.
- Friedrich Merz, a leading CDU/CSU candidate, who prioritizes fiscal discipline, economic growth, and cutting subsidies, while potentially allowing for budget deficits.
- The SPD and Greens advocate for moderate debt brake reforms, specifying a need to finance higher investment spending through debt.
- The FDP and AfD oppose debt brake reform altogether, insisting on fiscal discipline and maintaining spending rules.
- A recent poll by Forsa suggests that 55% of Germans favor either reforming or abolishing the debt brake, while only 41% prefer maintaining the current system.
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