Mario Fuest, head of the Ifo Institute in Munich, has sharply criticized the work of the federal government, particularly noting the absence of overarching reform projects. He stated that the ruling coalition has failed to develop a cohesive concept or long-term vision. According to Fuest, the coalition agreement merely contains a collection of individual measures that are being gradually addressed, but “there is nothing more”. He emphasized that the federal government urgently requires a credible overall strategy to make Germany competitive again in the coming years-a plan that can motivate and persuade the population.
Fuest argued that the coalition’s recent actions have actually increased public uncertainty. Regarding the decline in consumer spending, he held the government partially responsible. He pointed to the short-term confusion caused by policy shifts, such as the winding back of the relief premium. He remarked that for citizens who were anticipating financial relief, this sudden change was a negative message that cast doubt on the professionalism of the crisis management. Given the current geopolitical and economic climate, he stressed that the public expects well-thought-out policies.
Looking ahead to the issue of increasing public expenditures, Fuest called for strict limitations on the national debt ratio. He argued that legislation is urgently needed to cap the government spending ratio, suggesting a benchmark below 50 percent. To reach this target, he proposed that the federal government, states, and local municipalities must consistently cut costs, especially in the area of subsidies. Specifically, he suggested implementing a gradual plan to halve these subsidies over the next five years, arguing that such a multi-year approach would create both predictability and trust.
