Economist Achim Truger characterized the Federal Government’s budget as one resembling actual cutbacks. Speaking to the economics magazine “Surplus” he noted that aside from defense spending and interest payments, little real growth is apparent in the core budget, and even climate protection measures are facing cuts.
Truger also expressed concerns regarding tax reform, arguing that there is virtually no room for significant income tax reductions. Additionally, he criticized the introduction of a sugar tax, as well as increased taxes on tobacco and alcohol, stating that these measures disproportionately burden lower-income households.
According to Truger, the uncertainty surrounding the situation in Iran raises questions about whether the government will ultimately need to adjust its budget. If an immediate de-escalation does not occur, the government might have to compensate with an economic stimulus package and activate the exception clause of the debt brake. Finally, Truger claimed that the federal government is so preoccupied with its internal matters that the “dramatic financial crisis facing municipalities is almost entirely ignored”.
