Why the debt brake is also important for financial experts - guest article by Buschmann and Lindner

Why the debt brake is also important for financial experts - guest article by Buschmann and Lindner

According to a report by www.faz.net, Federal Ministers Marco Buschmann and Christian Lindner plead in a F.A.Z. article for the continued existence and compliance with the debt brake of the Basic Law. They argue that it is necessary not to burden future generations with excessive government debt, which exceeds the 60 percent of GDP prescribed in the European Stability and Growth Pact.

However, there is no substantive justification for setting the 60 percent quota in the European Stability and Growth Pact. When it was set, this limit was simply the average of the EU debt ratios and was only intended to limit the increase in debt in previous years.

As a financial expert, I must emphasize that compliance with the debt brake leaves future generations with less debt, but can have a significant impact on the state's infrastructure and development opportunities. Too strict compliance with the debt ceiling can lead to an outdated infrastructure system that hinders investment and harms long-term economic development.

It is important that debt policy is balanced with the long-term economic and infrastructure needs of the state. Adhering to the debt brake too rigidly can have long-term negative effects on the market and the financial sector.

It is therefore necessary that the discussion about the debt brake includes a balanced consideration of the state's long-term economic and infrastructural needs in order to ensure sustainable development.