Veronika Grimm, a member of the Federal Government’s Economic Expert Council, has urged the federal government to consider reforming, or potentially foregoing, the debt brake measure if circumstances require it.
Grimm told the “Rheinische Post” on Saturday that it is unlikely a consensus can be reached on strengthening the current regulations. In such a case, she argues it would be better to make no changes rather than to continue weakening the rules further. She pointed out that the debt brake had already been substantially undermined by constitutional amendments early in the legislative period.
Grimm criticized the current trajectory, noting, “We are seeing the bill: Indebtedness is rising at a breathtaking pace.” She stated that it remains completely unclear how the government intends to slow the increase in debt under the current framework. Consequently, she believes that tightening the rules regarding public debt is urgently necessary.
Specifically, she called for the open-ended expenditure exemption to be gradually eliminated. She proposed two ways this could happen: either by imposing a definitive cap, or by requiring that a larger proportion of defense spending be financed from the core budget each year until the defense budget is ultimately supported entirely by state revenues. However, she emphasized that the debt brake should not be loosened in any other area.
