Our Co-Director talked to Le Figaro about why the German government seeks to have it both ways as it raises very high amount of debt while at the same time it will reinstate the constitutional debt brake rule for 2023.
The debt brake rule has been suspended for the past three years to handle the impacts of the Covid-19 pandemic. For Finance Minister Christian Lindner, it has been a priority to return to the rule which limits the state’s annual structural debts to 0.35% of the GDP. Simultaneously, the Scholz government is avoiding the constraint by using other means to make debts through special assets/funds such as the big packages for defense, energy and climate.
“Lindner is walking a fine line between his desire to restore budgetary spaces for maneuver to reduce debt issuance on the one hand, and the need for investment and taxpayer support on the other,” says Johannes Lindner.
You can read the full article (in French) here.