Prominent economist Michael Hüther has delivered a sharp critique of the German federal government’s budgetary policies, expressing considerable concern over recent maneuvers related to debt management. Speaking to the business magazine “Capital”, Hüther stated he found the government’s approach to be “a scandal” questioning the transparency and sustainability of the strategies employed.
Hüther, director of the Institut der deutschen Wirtschaft Köln (IW), an institute closely linked to employer associations, previously advocated for temporary suspensions of the strict debt brake regulations. He now voices disappointment, arguing the current approach represents a “reshuffling” of spending plans rather than a genuine solution. He notes a complete disappearance of supplementary funding at the state level, while the federal government relies on quota systems to maintain solvency-a situation he deems particularly problematic.
While acknowledging that his criticism might be interpreted as validation for those who opposed reforming the debt brake from the outset, Hüther insisted his concerns stem from a fundamental disagreement with the underlying financial planning. He questioned the feasibility of Finance Minister Christian Lindner’s purported plans to secure necessary billions within the core budget. Hüther maintained that addressing years of deferred investment is unavoidable.
The economist further attributes the current predicament to a reluctance among the Christian Democratic Union (CDU) and Free Democratic Party (FDP) to honestly confront the issues surrounding the debt brake. He characterized the current situation as a consequence of inadequate preparation from the CDU and perceived manipulative practices within the Social Democratic Party (SPD)-led finance ministry.
