Household - Debt brake: Two finance ministers call for reform commission
Baden-Württemberg's Finance Minister Danyal 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" on Friday.
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 credit financing of additional investments, for example with a view to the challenges of transformation," the guest article states. "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 on Friday.
"In Germany, more experts are concerned with the question of how to circumvent the debt brake in accordance with the constitution rather than how to generate higher taxes through higher economic output," said Bavaria's Finance Minister Albert Füracker (CSU), countering the initiative of his counterparts from Berlin and Stuttgart. "We need to boost the economy, promote growth, then tax revenues will rise again and with them the scope for action," said the CSU politician.
Guest article in the Tagesspiegel
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- In response to the criticism of the debt brake, donors from various German states, including Baden-Württemberg and Berlin, have proposed a reform commission to the Bundesrat.
- The proposal for the reform commission, made by Baden-Württemberg's Finance Minister Danyal Bayaz (Greens) and Berlin's Finance Senator Stefan Evers (CDU), emphasizes the need for more academic input in developing and strengthening the debt brake.
- One potential reform suggested by the two politicians is the implementation of an investment rule within the debt brake, with the intention of financing additional investments while avoiding non-targeted expenditure.
- While the investment rule may offer leeway for federal state policies, such as education, some politicians, like Bavaria's Finance Minister Albert Füracker (CSU), have raised concerns about circumventing the debt brake according to the constitution.
- The Daily Mirror reported on the ongoing debate regarding the debt brake, highlighting differing opinions among German politicians regarding how to manage the country's finances and promote economic growth.
Source: www.stern.de
