Germany must permanently suspend the rule of the brake on the public debt in order not to curb the recovery after the Covid-19 pandemic, claims Tuesday the head of the chancellery, Helge Braun, in the press.
Read also: Why does the debt weigh on the following generations?
“
The debt brake will not be respected in the years to come, even with an otherwise strict spending discipline
,” warns Helge Braun, a close friend of Chancellor Angela Merkel, in a column published by the business daily Handelsblatt.
Also, the lasting renunciation of the limitation to the deficits is a "
strategic decision for the economic recovery
", just as it offers a "
reliable framework for the investments
", advances Helge Braun.
This will also avoid raising social security contributions "
by the end of 2023
" and proceeding to "
tax increases
", he adds.
The debt brake rule, enshrined in the German constitution, normally prohibits the federal government from borrowing more than 0.35% of its GDP.
In exceptional circumstances, however, he may ask the Chamber of Deputies for authorization to exceed this threshold.
300 billion euros in new debt
It happened in June when the country launched a 130 billion euro stimulus package for forward-looking investments and consumer revival, breaking down the debt brake rule after years of strict budgetary discipline.
These expenditures will cause 300 billion euros in new debt in 2020 and 2021 for the largest economy in the euro area, according to the Ministry of Finance.
Read also: Debt, taxes, bureaucracy ... The hidden face of the crisis
Helge Braun is certainly opposed to the sustainable use of the exception linked to natural disasters as in 2020 and 2021, which would open a "
door to a permanent relaxation of the debt rule
".
According to the head of the chancellery, on the other hand, it would be a question of "
combining a strategy of stimulating the economy in Germany with an amendment to the Basic Law
" making it possible to gradually return, after a few years, to the rule of the brake on indebtedness.
