“It’s Time for the Public to Wake Up”

The German Federal Ministry of Finance’s Working Party on Tax Revenue Estimates presented the results of its new analysis today. Friedrich Heinemann, head of the Research Unit “Corporate Taxation and Public Finance” at ZEW Mannheim and professor at Heidelberg University, has commented on this matter:

“Fiscal policy in Germany has rarely been as challenging as it is today. Following the shock of the Federal Court of Justice’s ruling on the debt brake, which ended the practice of creative off-budget accounting, the economic downturn is now hitting revenues in full. It’s not just policymakers who need to wake up; the public must too. It is impossible to ramp up future investments while continually creating new demands on the state, from health care to pensions. Prioritisation is now essential. Even slightly higher debt levels after a potential reform of the debt brake wouldn’t change this. What we need now is a responsible fiscal policy that reassesses the federal subsidy for pensions, including the pension formula, as well as the considerable growth in the federal administration’s workforce.”