Germany’s leading economic advisor, Monika Schnitzer, chair of the German Council of Economic Experts, has voiced criticism of the current coalition government’s budgetary and economic policies, specifically questioning recent initiatives like the proposed value-added tax reduction for the hospitality sector.
In remarks to the Redaktionsnetzwerk Deutschland, Schnitzer highlighted the existence of a budgetary gap and expressed concern regarding previously committed expenditures lacking clearly defined funding sources. She posited that addressing this discrepancy requires consideration of both increased revenue and reduced spending.
Schnitzer argued that prioritizing spending reductions would be a viable approach, specifically citing the planned increases to mothers’ pensions, agricultural diesel subsidies and the proposed tax reduction for the gastronomy sector as areas where savings could be realized. She emphasized that these expenditure increases currently lack corresponding proposals for compensatory funding.
The economist cautioned against incurring additional debt, especially for non-investment related expenditures, stressing the importance of fiscal responsibility in the current economic climate.
