A think‑tank closely aligned with the SPD, the Department for Future (Dezernat Zukunft), has released an extensive plan for a government reform package. In a 34‑page document called the “Bundeshaushaltsmonitor” reported on by “Der Spiegel”, the researchers outline how citizens could be relieved, the economy could be spurred, and the fiscal deficit narrowed. The think‑tank proposes a six‑part reform initiative aimed at cutting the share of subsidised employment and fostering greater growth, including a reshaped income‑tax structure.
Key to the proposal is a focus on middle‑income earners, who the authors argue are tax‑burdened too heavily. They recommend a so‑called “Stoltenberg light” approach-coined by a former CDU finance minister-to relax the “Mittelstandsbauch” (the middle‑class burden). This would involve raising the basic tax allowance and flattening the top part of the tax curve, while modestly increasing the top marginal rate.
The tax‑rate adjustment alone would only partially fund the desired relief, and in the short term would cost the state additional money. However, because the reforms are designed to stimulate employment and thereby boost private consumption, they are expected to deliver net relief of about €2.5 billion in the medium term.
Another element of the study is a move for the federal government to take equity in electricity network operators. The government has recently announced a 25.1 % stake in Tennet, the country’s largest transmission system operator. Following the Department’s recommendation, the state would acquire stakes in other network operators as well. By becoming a co‑owner, it could reduce the sharply higher network charges that keep German electricity prices above those in other countries. The reduced subsidies required to finance these charges are projected to yield a further relief of up to €1.6 billion.
The authors also call for a reform of the debt brake, arguing that investment should be allowed more flexibility provided it delivers productive outcomes. They suggest that additional debt to fund new kindergarten places would be justified, so long as there is an actual need. The benefit, according to the researchers, is that reforms would not require the budget merely to “make room” for them.
Florian Schuster‑Johnson, one of the study’s authors, said that Finance Minister Klingbeil has opened the door to reforms. He warned against half‑hearted savings or increases in consumption taxes, especially VAT, and stressed that the federal budget reflects an economic model that no longer works. To steer the budget back onto a sustainable path, he said, will require a long‑term perspective-“at least five to ten years”.