Both of these concepts are currently the subject of much debate, as the lack of public investment means that urgently needed measures are not being taken to secure Germany’s future as a business location. Calls for change are also coming from within the ruling coalition. Given the number of pressing issues the government must address, the SPD and the Greens want to fundamentally rethink the debt brake.[5] However, the FDP fundamentally rejects the idea of ​​lifting the debt brake. A minority of voters, 54%, hold similar views and want to keep the debt brake, according to the poll. But polls also show that four in 10 Germans want it to be eased.[6] The OECD certainly sees it that way. This suggests that the German government should take measures to stimulate economic growth, such as debt brake reforms that create room for net investment.[7]
Martin Morrison, chief European economist at DWS, is sympathetic to criticism of the debt brake. In his view, while a debt brake may seem prudent given Germany’s aging population and the need to avoid burdening future generations with too much debt, “the design of the debt brake does not act as a brake on growth.” It has been found that Governments need to ensure that future generations continue to have access to sufficient capital, so they need to ease the brakes on investment.
