Significant savings measures are anticipated in the coming years, despite newly available options for government borrowing, according to Christian Haase, head of the budget department for the center-right CDU/CSU parliamentary group in the Bundestag.
Speaking to “Welt” Haase, the parliamentary group’s spokesperson for budgetary affairs, indicated he expects concrete proposals for cuts from the Finance Minister by autumn. He asserted that previously planned reductions in administrative costs and personnel are insufficient to offset anticipated increases in interest expenses. “We are reaching the limits of our financial flexibility faster than we would like” he stated, emphasizing the necessity for a substantial shift in approach.
Subsidies are being identified as a primary area for potential cuts, particularly those related to programs supporting the transition to a climate-friendly economy. Haase pointed to instances where investments were made based on an overreliance on certain technologies that have since proven unsustainable.
Should efforts to curtail spending in specific areas fail, Haase suggested that blanket reductions, potentially ranging from ten to fifteen percent, might become unavoidable. He described this as a “lawnmower” approach – a precautionary measure to ensure overall fiscal responsibility.
Despite the calls for austerity, Haase acknowledged the possibility of a general reduction in electricity taxes. He indicated that a review of the legislature’s upcoming budget process will assess whether sufficient financial room exists to fulfill the promise of such a reduction, recognizing the public perception of inequity if only industrial consumers are relieved.
The future implementation of previously announced income tax cuts remains uncertain. Haase responded cautiously, stating that commitments to tax reductions necessitate a demonstration of how these will be funded, particularly given the recently approved government stimulus package. Subsequent tax policy will be contingent on the prevailing budgetary situation.