ifo Schnelldienst

Budget policy in crisis mode - reform of the debt brake necessary?

Contribution by Silke Uebelmesser to ifo Schnelldienst about the need of a future-oriented economy together with solid public finances
ifo Schnelldienst
Image: ifo Institut


The debt brake in its current form does not put future investments at a disadvantage compared to present consumption. Rather, it is a question of setting political priorities. The reform proposals currently under discussion aim to increase the state's investment incentives by providing additional financial scope for investment. However, this means additional burdens for future generations, who are already facing high implicit debts with subdued growth prospects. Both together, a future-oriented economy and sound finances, are therefore important in order to have room for maneuver in the future.

The text (in German) is available hereExternal link.