The Baden-Württemberg Finance Minister, Danyal Bayaz of the Green Party, is advocating for a comprehensive reform agenda to accompany the German government’s recently approved financial package. Speaking on the Capital economics podcast, Bayaz emphasized that sustainable economic growth cannot be achieved through financial investment alone, but requires structural reforms. He suggested the implementation of an initiative akin to “Agenda 2030.
While acknowledging the importance of the 500 billion euro special fund-supported by the Greens-Bayaz stated that it is not sufficient on its own. He pointed to a need for reforms encompassing areas such as pensions, healthcare and administrative simplification, suggesting significant progress is still needed.
Bayaz expressed concern that the government is utilizing the special fund as a temporary holding mechanism. He noted the inclusion of provisions like the commuter allowance and the mother’s pension in the new federal budget, arguing that these measures do not align with the intended purpose of the dedicated fund. He believes the current coalition government possesses the capacity for increased action and warns that the impetus for reform should not be lost.
Furthermore, Bayaz voiced a desire for stronger safeguards to prevent the financial package, which includes a relaxation of debt brake rules for defense spending, from being diverted by government ministries. He suggested that the reform component of the package should have been more firmly integrated and strictly enforced, advocating for a potential increase in the allowable defense spending relative to Gross Domestic Product.