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<p>In recent years, Germany has defused numerous political conflicts through additional financial leeway. Alongside declining interest expenses, high employment, low unemployment and strong corporate profits have led to increased tax revenues and reduced social expenditures. Special funds, reserves and changed accounting practices were used during the crisis years to create buffers. However, there is now a significant structural budget shortfall. The federal government permanently transferred tax revenues to states and municipalities while expenses continue to rise. Addressing these imbalances requires more than short-term solutions; new exemptions or exceptional measures are not the answer.</p>
</abstract>

In recent years, Germany has defused numerous political conflicts through additional financial leeway. Alongside declining interest expenses, high employment, low unemployment and strong corporate profits have led to increased tax revenues and reduced social expenditures. Special funds, reserves and changed accounting practices were used during the crisis years to create buffers. However, there is now a significant structural budget shortfall. The federal government permanently transferred tax revenues to states and municipalities while expenses continue to rise. Addressing these imbalances requires more than short-term solutions; new exemptions or exceptional measures are not the answer.

Financial Leeway in the Federal Budget: Structural Imbalances Cannot be Resolved by Postponing

Wirtschaftsdienst

This work is licensed under the Creative Commons Attribution 4.0 International License.

Haushaltsspielräume des Bundes: Strukturelle Schieflagen lösen sich nicht durch Aufschieben

In recent years, Germany has defused numerous political conflicts through additional financial leeway. Alongside declining interest expenses, high employment,...

Financial Leeway in the Federal Budget: Structural Imbalances Cannot be Resolved by Postponing

Published Online: Jun 14, 2023

Page range: 293 - 296

DOI: https://doi.org/10.2478/wd-2023-0092

© 2023 Désirée I. Christofzik, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.