Ahead of the budget planning sessions in the Bundestag, the Federal Court of Auditors has criticized Finance Minister Lars Klingbeil (SPD) for setting the government on a path of flawed fiscal policy. According to a report from the Bonn authority provided to the Bundestag’s Budget Committee-as cited by the magazine Politico-a comprehensive consolidation of federal finances is not taking place.
The auditors criticized the federal government for continuing its expansive course regarding spending and increasing public debt. The nation’s borrowing capacity is expanding significantly. The massive new debt, projected to exceed 200 billion euros annually in the coming years, could push the federal debt stock to three trillion euros by 2030. The auditors stressed that this must be addressed promptly to preserve the state’s ability to act.
The high level of new borrowing carries the cost of ever-increasing interest payments. This effectively narrows the policy room, which could only be kept open through further new credit. Consequently, the federal government is continuing down a path toward a debt trap.
Furthermore, the Federal Court of Auditors lamented that the existing debt regulation has become largely ineffective and hollowed out. It argued that decisive budgetary consolidation cannot be postponed any longer, urging the federal government to abandon its trajectory toward the debt trap immediately.
