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<p>The current coalition’s budget negotiations for 2024 are proving to be very difficult. For the first time since 2010, there is talk of consolidation measures to meet the requirements of the debt brake. The sudden budget dispute does not have its origins in worsening revenue prospects, but in tax cuts and additional spending, which were mutually agreed for 2023, and in sharply rising interest payments. While the increase in interest expense is overstated by the methods currently used, a change in methods would probably only delay the issue of consolidation. Fiscal policy in Germany is on the verge of a turning point.</p>
</abstract>

The current coalition’s budget negotiations for 2024 are proving to be very difficult. For the first time since 2010, there is talk of consolidation measures to meet the requirements of the debt brake. The sudden budget dispute does not have its origins in worsening revenue prospects, but in tax cuts and additional spending, which were mutually agreed for 2023, and in sharply rising interest payments. While the increase in interest expense is overstated by the methods currently used, a change in methods would probably only delay the issue of consolidation. Fiscal policy in Germany is on the verge of a turning point.

Debt Brake Under New Framework Conditions: A Turning Point in Fiscal Policy

Wirtschaftsdienst

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

Schuldenbremse unter neuen Rahmenbedingungen: Zeitenwende in der Finanzpolitik

The current coalition’s budget negotiations for 2024 are proving to be very difficult. For the first time since 2010, there is talk of consolidation measures...

Debt Brake Under New Framework Conditions: A Turning Point in Fiscal Policy

Published Online: Jun 14, 2023

Page range: 297 - 300

DOI: https://doi.org/10.2478/wd-2023-0093

© 2023 Jens Boysen-Hogrefe, published by Sciendo

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