Long-time economic advisor Peter Bofinger has strongly criticized the tax relief decided upon by the governing coalition, calling it insufficient. Speaking to the “Handelsblatt”, he stated that the planned tax cut of ten billion euros in 2027 represents only one-quarter of a percent of the Gross Domestic Product, and in some cases, merely offsets the effects of cold progression. According to Bofinger, this measure will not function as a driver of growth.
Furthermore, he pointed out the lack of additional measures designed to stimulate company investment. Bofinger described the government’s investment boost from 2025 as a misstep. He argued that it has resulted in significant losses of revenue for public finances and ultimately served only as a useless zero-interest loan for businesses. He urgently called for a dedicated investment premium for companies willing to expand their investments.
Regarding other policies, the economist labeled the requirement to document sickness from the first day a “bureaucracy monster.” He noted this contradicted the stated goal of reducing red tape. On a more positive note, Bofinger endorsed the concept of a state housing development company, emphasizing that the housing issue is critical for many people and that politicians must finally take active steps to address it.
