Financial expert analyzes Merz's position on the debt brake - savings alternatives for the federal budget

Financial expert analyzes Merz's position on the debt brake - savings alternatives for the federal budget

According to a report by www.merkur.de,

CDU leader Friedrich Merz sticks to his position of not relaxing the debt brake in the Basic Law and instead making savings in other areas, such as citizens' money. He made this clear in the ARD program “Report from Berlin”. In doing so, he contradicts the discussions of the traffic light coalition, which is considering suspending the debt brake and a possible reform for the 2024 federal budget.

According to Merz, the budget crisis is not so great that it would be forced to take on further debt, as there is neither a natural disaster nor an exceptional emergency that would justify this. Finance Minister Christian Lindner from the FDP also expressed skepticism about a renewed suspension of the debt brake and emphasized the need to make savings in other areas.

The discussion about the debt brake and the possible suspension for 2024 raises uncertainty on the financial markets. A suspension could lead to increased government debt, which could have a long-term impact on interest rates and the attractiveness of government bonds. With rising debts and uncertainty about budget policy, investors could become more cautious and increasingly seek refuge in other forms of investment.

Merz also spoke out against an increase in citizens' money, which could also have an impact on social policy and the income situation of the population. Failure to increase citizens' allowance could lead to dissatisfaction among parts of the population and increase political tensions.

Overall, the debate about the debt brake and citizens' money could have a significant impact on the financial markets and budget policy in Germany in the coming years. It is important to keep an eye on these developments and analyze possible impacts on different industries and types of investments.