Economic situation - Lindner calls for a change in mentality: more performance needed
Federal Finance Minister Christian Lindner (FDP) called for a mindset shift and a return to the principles of the social market economy in Germany. All state expenses must be earned first. "Our country has gotten used to top-notch social security, top-notch ecological standards, top-notch living standards," Lindner said at the ifo annual meeting in Munich on Thursday. "It's time to learn anew that all of that is a prerequisite: namely top performance."
This applies to citizens just as much as it does to companies. Some companies even sought success less in competition than in the vicinity of the state budget. Value creation is not based on subsidies and redistribution.
Lindner defends debt brake
The Finance Minister vehemently defended the debt brake. State revenues were soon to reach a billion euros: "We have a lot of money!" However, there is a lack of courage to set priorities in spending. Berlin's government, for example, is calling for the abolition of the debt brake because it needs money for schools, but at the same time it is introducing a 29-euro ticket for public transportation: The 300 million euros for this ticket would be better spent on schools, Lindner said.
The debt brake is enshrined in the Basic Law, and in addition, the EU also sets limits on the expenditures of its members. Germany is the stability anchor of the monetary union, and higher German debt would be a devastating example. "For us, the standard 'lead by example' also applies in fiscal policy," Lindner said to great applause from the participants of the ifo annual meeting.
Ifo President: Work should pay more
Ifo President Clemens Fuest described the aging and shrinking workforce as "perhaps the greatest challenge." Economic growth would be permanently halved as a result. Therefore, politics must create more incentives for employment. But for large parts of the population, working more no longer pays off, Fuest said, citing as an example a family with two children and a gross income of 3000 euros in Munich. If the parents worked more and earned 2000 euros in gross additional income, they would only have net 30 to 40 euros more, because housing benefits and other social benefits would be cut or reduced. "It's remarkable that there are no initiatives to change anything about that," Fuest said.
At the annual meeting, the ifo Institute also celebrated its 75th anniversary. Ludwig Erhard, the protagonist of the economic miracle after World War II, laid the foundations for applied economic research in Munich as Economics Minister in Bavaria. In 1949, the Information and Research Institute for Economic Observation and the South German Institute for Economic Research merged to form the ifo Institute. The monthly published ifo Business Climate Index, based on the survey of thousands of companies, is one of the most important leading indicators of economic development in Germany. Lindner praised the efforts of the Institute to "overcome economic illiteracy in our country."
- At the Annual General Meeting in Munich, Federal Finance Minister Christian Lindner advocated for a return to the principles of the social market economy, stressing the importance of earning revenues before covering expenses.
- Lindner criticized some companies that prioritize proximity to state budgets over competition, arguing that value creation is not dependent on subsidies or redistribution.
- The FDP leader firmly defended the debt brake, highlighting Germany's growing state revenues and the lack of courage to prioritize spending effectively.
- Berlin's government, in need of funds for schools, calls for the abolition of the debt brake while simultaneously introducing a 29-euro ticket for public transportation, a move Lindner criticizes as misguided financing.
- Ifo President Clemens Fuest pointed out the aging and shrinking workforce as a significant challenge, stating that there is a need for greater incentives to promote employment due to the reduced net gain when working more for many families.
- In celebration of its 75th anniversary, the ifo Institute, founded by Ludwig Erhard in Bavaria, was praised by Lindner for its efforts in promoting economic research and overcoming economic illiteracy in Germany.
