In its current forecast, the Budget Council expects the budget deficit to decline from 3.2 percent of gross domestic product (GDP) this year to 2 percent in 2023, despite the expected economic slowdown. There is still a need for action, it said. In order to regain budgetary leeway, a cyclical reduction of the current expansive fiscal policy is recommended.
First the corona aid, then the subsidies for expensive energy and the tax reform: that has cost the state a lot of money and the deficits have increased (to 3.2 percent this year). But from 2023, the support will expire.
Nevertheless, the new debt of the state budget will always exceed 2 percent in the coming years. There may be new editions such as eg B. further energy cost subsidies are not even included.
“The Minister of Finance has no leeway there. Therefore, a new concept is needed to stabilize state finances, I’m not even talking about a zero deficit,” said Christoph Badelt, head of the Fiscal Council. Because there will be more and more expenditure on health and care, pensions, etc.
The crisis measures should also be counter-financed. Badelt denounces the backlog of reforms in education and in the hospital system.
As far as subsidies and social benefits are concerned, there is a lack of transparency and data comparison with the federal states. He also warns against “pointless” spending, especially if you always hand out money with the watering can.
Source: Krone
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