Significant austerity measures are likely unavoidable in the coming years, despite newly available options for government borrowing, according to Christian Haase, head of the budgetary affairs department of the CDU/CSU parliamentary group in the Bundestag.
Speaking to “Welt”, Haase, the group’s budgetary policy spokesman, indicated that the currently planned reductions in administrative costs and personnel are insufficient to offset the anticipated rise in interest rates. “We are reaching the limits of our financial flexibility faster than we would like” he stated. He anticipates concrete proposals for savings from the finance minister by autumn.
Haase specifically cited subsidies as a prime target for cuts. He suggested a reassessment of programs designed to support the transition to a climate-friendly economy, stating that “too much trust has been placed in certain technologies that have subsequently proven unsustainable.
Should specific area cuts prove difficult to implement, Haase suggested the possibility of across-the-board reductions. He characterized such a move – a “ten to fifteen percent blanket cut” – as preferable to inaction.
Despite these calls for fiscal restraint, Haase expressed a degree of optimism regarding the possibility of a general reduction in electricity taxes. He indicated that his group would examine the feasibility of fulfilling this promise during the upcoming parliamentary budget process, recognizing the perception of unfairness arising from relieving industry without extending the benefit to private electricity consumers.
The future of previously announced income tax reductions remains uncertain, according to Haase. He cautioned that promises of such cuts require a clear demonstration of how they would be funded. He pointed out that the government has already implemented a previously agreed-upon emergency program and any further tax relief will depend on the evolving budgetary situation.
