Germany’s Obstinate Stinginess Hurts Everyone
One of the world’s big economic problems is Germany’s constitutional requirement to balance its public budgets.
How do I talk to her about our debt?
Photographer: Michele Tantussi/Getty Images EuropeIt’s not often these days that Germany’s Social Democrats have good economic ideas. But a forthcoming initiative by one of them makes eminent sense, and deserves more support than it’s likely to get. Olaf Scholz, the finance minister, wants to suspend the country’s so-called “debt brake,” a constitutional limit on public deficits and borrowing. But the SPD’s senior partners in the governing coalition, the Christian Democrats of Chancellor Angela Merkel, are already lining up to dismiss the proposal. They should think again.
Germany’s fiscal cap isn’t exactly unique. Switzerland and Austria have versions of it, too, while the European Union and most U.S. states have constraints on public budgets in some other form. But the Germans, as is their wont, have not only made their rules especially stringent but also abided by them rather obsessively.