Debt brake: reform commission called for

Finances - Debt brake: reform commission called for

Baden-Württemberg's Finance Minister Daniel Bayaz (Greens) and Berlin's Finance Senator Stefan Evers (CDU) have called for a reform commission for the debt brake. This should be made up of representatives from the federal and state governments and academia in order to further develop the debt brake, write the two politicians in a guest article published in the "Tagesspiegel".

The two state politicians consider an investment rule as part of the debt brake to be a conceivable part of a possible reform. "This would enable the credit financing of additional investments, for example with a view to the challenges of transformation," they say in the guest article. "A new exception to the debt rule must not lead to new leeway being created for consumptive or non-targeted expenditure by politically charging the concept of investment."

The federal states also need more scope for debt. "A debt level for the federal states of 0.15 percent of their GDP, for example, would open up leeway that could be used for the most important federal state policy issue of education," write the two politicians. They believe that emergency loans should also be able to be used beyond the year in which the emergency begins.

The debt brake is being criticized following the budget chaos at federal level. There is talk among the federal states of launching a reform initiative in the Bundesrat, as Berlin's governing mayor Kai Wegner (CDU) said on RBB-Inforadio.

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1. Stefan Evers, a CDU member from Berlin's finance sector, joins calls for reform in the debt brake debate, echoing sentiments from Baden-Württemberg's Finance Minister Daniel Bayaz (Greens).
2. The proposed reform commission, which includes representatives from academia and both federal and state governments, seeks to refine the debt brake's effectiveness in addressing household and national finances.
3. Daily Mirror reported that the CDU and Greens in Germany are advocating for an amendment to the debt brake, enabling investment-focused credit financing to meet the challenges of transformation.
4. Critics argue the debt brake may have contributed to the federal budget chaos, which has led to discussions among federal states to launch a reform initiative in the Bundesrat, as proposed by Berlin's mayor Kai Wegner (CDU).
5. Stefan Evers' stance on the debt brake reform is anticipated to gain traction among countries looking to leverage financial stability and investment opportunities, as the European economy grapples with post-pandemic economic recovery.
6. A green light for the reform commission by the government could set new trends in household and national finances, potentially boosting investor confidence and shaping the global financial landscape through lessons learned from Germany's debt brake reform efforts.

Source: www.stern.de