Germany is approaching fiscal conditions similar to the United States due to shrinking budgetary flexibility, according to a recent analysis by the think tank Dezernat Zukunft, as reported by Der Spiegel.
The analysis projects a potential decrease in discretionary spending from 25% to three percent within the next decade – equating to just €16 billion, or less than €1 billion per ministry. To maintain operational capacity under such constraints, the government would likely need to repeatedly issue new debt through special funds, a practice reminiscent of the United States, which frequently faces politically charged debates surrounding its debt ceiling.
Philippa Sigl-Glöckner, founder of Dezernat Zukunft and a former SPD candidate for the Bundestag and co-author Florian Schuster-Johnson argue that this trajectory is unsustainable from both democratic and fiscal perspectives. They attribute the tightening budgetary constraints primarily to rising interest payments and so-called “survival subsidies” including income support measures like the Bürgergeld (citizen’s income).
The think tank suggests the federal government should prioritize leveraging budgetary resources for sustainable growth and improved labor market utilization. Furthermore, they emphasize the necessity of revising the debt brake as planned.
