A proposal by several economists for the German government’s exploratory talks with the Union and SPD parties to set up two large “special funds” for the military and infrastructure has been praised by the director of the institute for macroeconomics and economic research, Sebastian Dullien.
According to Dullien, the idea of setting up the special funds, worth a total of two billion euros, is “very sensible”. He said that the advantage of this approach is that it would allow for the necessary investments in infrastructure to be made without the military budget being affected. “Germany desperately needs these billions” Dullien stated in an interview with T-Online on Monday.
Dullien also believes that the path of setting up special funds would create quick decision-making capabilities, even though he thinks a fundamental reform of the debt brake is necessary to enable more state investments on credit basis in the long run. “However, this is a complex undertaking that cannot be implemented within three weeks” he said.
With the approximately 800 billion euros that are currently being discussed, a future government would have enough leeway to finance all necessary expenses in the new legislative period and possibly even have some surplus, Dullien said. This would buy time for a thorough consideration of a debt brake reform and it might even be possible to find a majority with the Left Party for such a reform, Dullien hopes.