Germany Holds Back Europe
Could this fiscal mistake by German politicians lead to the downturn of the German economy" Michel Santi shares his insights.
The post Germany Holds Back Europe appeared first on LUXUO.
German Chancellor Olaf Scholz (Image courtesy of Getty Images)
It was the most serious economic mistake made by Germany in the last 20 years. Celebrated at the time as a victory for fiscal and budgetary discipline, breaking away from the carelessness attributed to the vast majority of European Union members who were strongly encouraged to follow suit. Engraved in the marble of the nation’s constitution. Today, German politicians no longer know how to get rid of it.
The debt brake has become an impossible equation to solve, forcing the country?s leaders to resort to all sorts of accounting tricks or maneuvers to bypass it. In short, this strict and non-negotiable control of public deficits is very bad news for Olaf Scholz and his government. After all, how on earth can a country manage, in the current economic climate, with the constraint of limiting its structural deficit to 0.35 percent of the federal GDP, and additionally imposing budgetary balance on its 16 states" Not content with this uncompromising orthodoxy, Wolfgang Schäuble, Merkel?s Finance Minister who passed away recently, took great pleasure in tormenting what were then called “peripheral European nations” like Italy or Spain, even imposing the famous “Schwarze Null” prohibiting...
The post Germany Holds Back Europe appeared first on LUXUO.
German Chancellor Olaf Scholz (Image courtesy of Getty Images)
It was the most serious economic mistake made by Germany in the last 20 years. Celebrated at the time as a victory for fiscal and budgetary discipline, breaking away from the carelessness attributed to the vast majority of European Union members who were strongly encouraged to follow suit. Engraved in the marble of the nation’s constitution. Today, German politicians no longer know how to get rid of it.
The debt brake has become an impossible equation to solve, forcing the country?s leaders to resort to all sorts of accounting tricks or maneuvers to bypass it. In short, this strict and non-negotiable control of public deficits is very bad news for Olaf Scholz and his government. After all, how on earth can a country manage, in the current economic climate, with the constraint of limiting its structural deficit to 0.35 percent of the federal GDP, and additionally imposing budgetary balance on its 16 states" Not content with this uncompromising orthodoxy, Wolfgang Schäuble, Merkel?s Finance Minister who passed away recently, took great pleasure in tormenting what were then called “peripheral European nations” like Italy or Spain, even imposing the famous “Schwarze Null” prohibiting...
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