Economists who laid the groundwork for the finance package of CDU/CSU and SPD are praising the agreement of the parties. “It is a very important step for the security in Germany and Europe” said Moritz Schularick, President of the Kiel Institute for the World Economy (IfW), to the “Handelsblatt” (Wednesday edition).
The Union and SPD plan to exempt additional defense expenses from the debt brake. “I ultimately even consider it the best solution, as it makes our future situation more flexible and also allows for long planning horizons” Schularick said. At the special fund for infrastructure, it will be important that the money is invested sensibly and quickly.
“The agreement of the mediators is a ‘Game Changer’ a strong and good package” said the Düsseldorf economics professor Jens Südekum. “It does not exactly, but rather closely, match what we had proposed.”
What is important now is that the money actually reaches the street. “In the infrastructure sector, the special fund must be accompanied by an acceleration of the approval procedures.” Also in the defense sector, the money should not be used for outdated equipment, but rather the latest technology should be in the foreground.
Schularick and Südekum had made proposals for special funds for the defense and infrastructure sectors last week, together with Ifo President Clemens Fuest and IW Director Michael Hüther, on the basis of which the mediators, according to media reports, negotiated.
The Union and SPD plan to change the debt brake in the Basic Law in the coming week. For this, they need a two-thirds majority, for which the consent of the FDP or the Greens would be necessary. Defense expenses from the federal budget, which are above a level that corresponds to one percent of the gross domestic product, are to be exempted from the restrictions of the debt brake. A special fund of 500 billion euros for the next 10 years is also to be created for investments in infrastructure, of which 100 billion euros are to be allocated to the federal states. The Greens had already demanded this in the 2021 election campaign and a consent of their faction is therefore likely. A more comprehensive reform of the debt brake, the Union and SPD plan to pass in the newly elected Bundestag – for this, they need the consent of the AfD or the Left in addition to the new majority relations.