Economic Expert Monika Schnitzer Provides Details on Proposed ‘Defense Fund’
Monika Schnitzer, the head of the economic experts, has outlined the details of the proposed “Defense Fund” she has been advocating for. According to Schnitzer, speaking to the Rheinische Post, a clear signal needs to be sent to Moscow and Washington that Europe, Germany and Ukraine will not be left to face the situation alone and that a swift and massive strengthening of defense readiness is necessary.
Schnitzer emphasized that in the current situation, the only way to achieve this is through a new defense fund or an increase in the existing defense budget in the Bundestag. She stated that if the goal is to extensively renovate streets, harbors and bridges, which is also part of the defense readiness increase, the discussion is no longer about 300 billion euros by 2030, necessary to secure three percent of defense spending, but about much more.
The economist also called for a permanent reform of the debt brake, stating that a stability-oriented reform, as proposed by the Council of Economic Experts, is necessary to have permanent more room for debt-financed spending. This should be linked to binding guidelines for defense, infrastructure and education, to ensure that the loans are not used for electoral gifts.
Schnitzer warned against using new debt flexibility for pension increases, calling it a fundamental mistake. Instead, she demands cuts in the pension system, stating that structural reforms in the pension and health insurance systems are unavoidable and would, in the long run, support the social insurance and the state’s finances.