Debt brake: Economists call for easing - pressure on the Federal Finance Minister is increasing

Debt brake: Economists call for easing - pressure on the Federal Finance Minister is increasing

According to a report by www.sueddeutsche.de There is a discussion about whether the debt brake should be relaxed, as the Council of Experts for the Assessment of Overall Economic Development has spoken out in favor of reforming the debt brake. This debt brake limits the federal government's new debt to a maximum of 0.35 percent of economic output in normal years. Critics argue that this rule is too rigid given the massive challenges Germany faces, such as the country's climate-friendly restructuring and investments in education, research, infrastructure and defense. The discussion about whether the debt brake should be relaxed is controversial.

There are different points of view in this debate. On the one hand, it is argued that easing the debt brake could create more financial scope for urgently needed investments. On the other hand, it is emphasized that before changing the Basic Law, it must be clear which projects are really urgent and whether they would generate returns for society as a whole in the long term. It should also be noted that borrowing too much could have a negative impact on the current interest burden and the national debt.

The recommendation of the Council of Experts to allow borrowing if the overall national debt is low and the current interest burden is manageable could have an impact on the market and the financial sector. Easing the debt brake could lead to higher levels of investment and more economic growth. However, care must be taken to ensure that borrowing is done responsibly and has long-term positive effects on society. Ultimately, it is important to conduct the discussion about easing the debt brake carefully and to take into account the long-term effects on the national budget and the economy.