Berlin has to have budgetary discipline

The Kovid-19 pandemic is forcing Germany to have budgetary discipline, in which it has long been a rival in Europe, a close friend of Angela Merkel warned on Tuesday, with Berlin anticipating a significant debt in the coming years .

Chancellor Hague Braun announced that “date breaks will not be respected in the coming years, even with a strict spending discipline otherwise”, in a column published by the trade daily Handblatt.

In other words, this close proximity to Chancellor Angela Merkel’s military for a permanent exemption from the sacred rule of “date break” engraved in German Basic Law since 2009, and the country to this day displaying the lowest public debt ratio in the G7 Allows countries.

However, the permanent abandonment of limiting the deficit is a “strategic decision for economic recovery”, the way it aims to present a “credible framework for investment” that the country needs to protect its competitiveness, right Helge Braun Stops.

“The time has come for politicians and social partners to develop a general strategy for how Germany can overcome this crisis economically and sustainably,” he continued.

He added that lifting the budgetary rigor also meant that we would not touch social security contributions “until the end of 2023” and there would not be a “tax hike” to pay off debt.

– Development Importance –

Eight months before the legislative elections, it marks a significant development for the conservative party, the Christian Democratic Union (CDU), which so far promises a swift return to budgetary discipline, unlike its ally in the “Grand Alliance”, Social. Democratic Party (SPD).

The debt break rule normally prohibits the federal government from borrowing more than 0.35% of its GDP. In exceptional circumstances, however, he may ask members for authorization to exceed this limit.

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This occurred in June when the country launched a massive 130 billion euro stimulus plan to revive investment and consumption for the future in an attempt to reverse the negative consequences of a “bottling” of the country due to the Kovid-19 epidemic . .

After years of strict budgetary discipline, Berlin broke the debt break rule for the first time. According to the Ministry of Finance, these expenses will cause EUR 300 billion in new debt in 2020 and 2021.

– low growth –

The ban on coronovirus is stricter on Mr Bronn’s appeal.

Berlin is particularly concerned about the presence of new forms of the virus, while vaccination campaigns are delayed and give rise to many criticisms.

Economy Minister Peter Altmaier is due to present the German government’s updated growth forecast for this year on Wednesday. However, after a 5.0% decline in GDP in 2020, a rebound of 4.4% can be anticipated this year, according to the press.

Hal Bronn is certainly not advocating a “permanent” waiver of the debt rule, but “amending the Basic Law” to allow a gradual withdrawal after a few years, for a balanced public finances.

Even surrounded by precautions, the idea has drawn criticism.

“A constitutional change to reform the date break is the beginning of its end”, the government assured the chairman of the Committee of Economic Wise Men advising Lars Feld, in a “rinscheck post”.

According to The Economist, the CDU-CSU union must “make such concessions to other parties that there will be no effective national debt limit in Germany”, with Feld adding “those that have already sunk,” with European budgetary rules.

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In opposition, Katja Kipping, the leader of the radical left party Die Linke, believes to the contrary that the proposal does not go far enough, citing “Die Welt” against the “previous fetishism of the union date break”.

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