Tax & Spend

Germany Must Be Able to Run Budget Deficits, Ifo’s Fuest Says

Spending cuts and tax increases aren’t enough, he says
Fuest speaks after court ruling plunged coalition into crisis

Germany’s business outlook improved for a third month in November, pointing to an impending recovery for an economy that is probably in a recession and beset by a budget crisis. Ifo Institute President Clemens Fuest discusses the data on Bloomberg Television.Source: Bloomberg

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By Alexander Weber and Francine Lacqua

November 24, 2023 at 10:24 AM UTC

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The German government can’t manage without deficits if it wants to fulfill its investment and climate ambitions, according to Ifo President Clemens Fuest.

The ruling coalition could review subsidy plans and increase a levy on carbon emissions to mitigate the impact of last week’s court judgment, but “it’s impossible in my view to come up with all the necessary funding just through cuts and tax increases,” he said on Bloomberg TV on Friday.