The think tank belonging to the Social Democratic Party, Dezernat Zukunft, has presented a detailed plan for a reform package for the federal government. In a 34‑page “Bundeshaushaltsmonitor”, covered in “Spiegel”, the researchers outline how citizens can be relieved, the economy stimulated, and the budget deficit closed. The think tank calls for a six‑part reform package that would reduce the share of subsidised employment and boost growth, among other measures such as a new income‑tax structure.
According to the authors, middle‑income earners are currently overburdened by taxation. They recommend that the cabinet adopt the “Stoltenberg light” proposal, a suggestion made by former finance minister Peter Altmaier of the CDU, to cut the “mid‑enterprise belly”. This would involve raising the basic tax exemption and easing the slope of the tax curve, while slightly increasing the top marginal rate. The increased rate would only partially fund the relief; in the short term it costs the state money. Because the reform promotes employment and thus stimulates private consumption, it is expected to produce a medium‑term fiscal relief of €2.5 billion.
The study also proposes that the federal government buy shares in electricity grid operators. The government recently announced that it would take a 25.1 % stake in Tennet, the largest grid operator in Germany. If the proposal of Dezernat Zukunft were implemented, the state would acquire stakes in other grid operators as well. This could lower the sharply rising network fees, which are a key factor keeping German electricity prices well above those of other countries. As a partial owner, the state would pay fewer subsidies to cover these fees, potentially saving up to €1.6 billion in the long run.
A reform of the debt brake is also deemed necessary, the study states. Dezernat Zukunft calls for further loosening of investment restrictions, allowing spending that has productivity effects. For instance, additional debt for kindergartens would be acceptable if there is genuine need for more slots. The authors argue that this would allow reforms to be implemented without having to “save” them out of the budget.
“Finance Minister Klingbeil has opened the door to reforms” said Florian Schuster‑Johnson, one of the study’s authors. The economist warned against half‑hearted savings or raising consumption taxes, especially the VAT. “The federal budget faces a more fundamental problem: it reflects an economic model that no longer works”. To set the budget back on a sustainable path will require endurance. “That will take at least five to ten years” the director of Dezernat said.
