Traffic light coalition agrees on budget - is Germany facing a recession? Expert warns of the consequences of the planned austerity measures.

Traffic light coalition agrees on budget - is Germany facing a recession? Expert warns of the consequences of the planned austerity measures.

According to a report by www.inforadio.de, the traffic light coalition has agreed on a budget for the coming year and plans to comply with the debt brake again in 2024. However, this raises concerns among financial expert Peter Bofinger, who warns that this could send Germany into a deep recession.

According to Bofinger, the austerity measures planned to comply with the debt brake could put further strain on the already ailing German economy and drive it into recession. In addition, he fears that planned tax increases could fuel inflation in Germany again, especially measures such as increasing the C02 tax and VAT on gas and in the catering industry.

Bofinger therefore advocates a reform of the debt brake because he sees compliance with the current debt limit as damaging to the national economy. He emphasizes that even conservative committees such as the scientific advisory board of the Federal Ministry of Economics have spoken out in favor of such a reform.

The discussion about compliance with the debt brake and the associated austerity measures could therefore lead to an intensive debate about the future of the German economy and financial policy. If the planned measures are actually implemented, the impact on the market and the financial sector could take the form of continued economic uncertainty and possibly a further increase in inflation.