A German Economist Sees a Quick Solution for the Debt Brake Reform
Jens Südekum, an economist from Düsseldorf, believes a quick solution can be found for the debt brake reform. “It’s clear to everyone that a solution is needed, or else we won’t get anywhere” Südekum told the Capital economic magazine. The majority wants the debt rule to be reformed.
Currently, parties are discussing whether the current Bundestag will reconvene to pass a constitutional amendment before the new government is formed. However, even if this does not happen, Südekum sees opportunities for a reform with the help of the Left Party. “The Left is not the Free Democratic Party. The Left essentially has no objection to a debt brake reform – unlike the AfD” Südekum said. However, he made it clear that “the Left would not agree to a new special fund for the federal armed forces without a fight. This could be very painful for some in the Christian Democratic Union.”
According to Südekum, a dual solution is the most likely option for the reform’s implementation: on the one hand, the same debt leeway would be granted to the federal states as to the federal government, currently at 0.35 percent of the gross domestic product. On the other hand, a new special fund for the federal armed forces would be established. If the Left Party were to object, a special fund for infrastructure could be an alternative. “Something like that would be acceptable to the Left. And the freed-up funds in the budget could then be used for the military” Südekum said.