The country's chief financial officer discusses finances. - Lindner outlines plans for a debt brake, citizens' income reform, and solidarity tax reduction.
The Federal Finance Minister, Christian Lindner, from the FDP party, emphasized the importance of sticking to the budget restrictions, tightening the citizens' income, and eliminating Soli. According to Lindner, it's crucial to reinforce growth and avoid anything that might hinder this process. He made these remarks at the Real Estate Economy Day in Berlin.
Investments in public infrastructure are at an all-time high and will continue to stay that way. However, prioritizing certain areas is more important now. Lindner mentioned that citizens desire clear statements since they believe that whatever is being distributed is eventually paid for by them. Stability remains the number one priority in financial policy.
It wouldn't make sense, as per Lindner, to use borrowed money against the central bank. For instance, the US Federal Reserve has been unable to implement a yield curve inversion because, due to significant government infrastructure investments, there's been an increase in inflation. He said, "The debt brake isn't a fixation; the debt brake is also an inflation brake."
Lindner did not directly mention the ongoing negotiations within the coalition regarding the federal budget for 2025, although his stance holds relevance. The SPD and the Greens are promoting more investments and a loosened scope for the debt brake. Lindner's stance at the Real Estate Day was backed by the need for more construction project profitability due to suitable interest rates. Many projects would have been put on hold otherwise.
Lindner reiterated his support for structural reforms to increase Germany's competitiveness. He believes that the citizen's income should be viewed as a safety net instead of a "derivative of unconditional basic income." He also advocated for bureaucracy reduction, for instance, in the Supply Chain Act, and hinted at demands for the continuation of combustion engines. Lindner stated, "A new technology must be safely entered into before an exit can be considered - this applies to energy supply and electricity, as well as cars."
Lindner believes that stimulating the economy requires a tax push. Therefore, the "cold progression" should be phased out completely in the next two years. He also supported a corporate tax reform, offering reliefs for the economy. Additionally, Lindner confirmed his suggestion to eliminate the solidarity surcharge. The Soli is mostly paid by those taking economic risks.
Lindner also believes that simplifications in standards and procedures are vital for the construction industry. For instance, there should be more lenient deviations from norms with the building type e (like "simple"). However, a slimmed-down building code draft hasn't entered the parliamentary procedure since there are still disagreements. Lindner defended the extension of the possibility for states to impose rent caps. "But we must ensure we don't go beyond that," he said.
Read also:
- Lindner's plans for budge restrictions and financial reforms, including a debt brake, citizens' income, and Soli reduction, align with the Federal Government's financial policy, aiming to avoid inflation.
- Despite high investments in public infrastructure, prioritization is crucial for the FDP, and their stance is driven by the desire for clear financial statements from the government, recognizing that citizens ultimately bear the cost.
- The US Federal Reserve's struggle with implementing a yield curve inversion is due in part to the increasing inflation caused by significant government infrastructure investments.
- German Finance Minister Lindner advocates for a focus on construction project profitability due to suitable interest rates, emphasizing the need to maintain financial stability, which is paramount in financial policy.
- The ongoing coalition negotiations regarding the federal budget for 2025 involve promoting more investments and a loosened debt brake, which contrasts with Lindner's stance on fiscal responsibility and the importance of avoiding inflation.
- German households may benefit from Lindner's suggested elimination of the solidarity surcharge, especially since it primarily affects those taking economic risks.
- The repercussions of the debate on eliminating the rental cap in Berlin, which Linder defends, extend beyond housing and demonstrate the complex interplay of economic, social, and political issues in Germany's financial landscape.
