White smoke in Berlin: The new coalition seems to have agreed with the Greens on a massive debt brake change for defense, infrastructure and climate investments and the states. Structural space will more than triple from ~0,9 to 3+, exact number depending on how much defense spending will increase. - ThreadSky

About ThreadSky

lucasguttenberg.bsky.social • 20 days ago

White smoke in Berlin: The new coalition seems to have agreed with the Greens on a massive debt brake change for defense, infrastructure and climate investments and the states. Structural space will more than triple from ~0,9 to 3+, exact number depending on how much defense spending will increase.

Comments

lucasguttenberg.bsky.social•20 days ago

Or to be precise: The space is ex-ante unlimited as there is no ceiling on defense spending. The only ceiling here now comes from EU rules.

gzachmann.bsky.social•20 days ago

Here @jzettelmeyer.bsky.social argues that the space is in fact limited as Germany's structural net borrowing limit of 0.35% of GDP includes the interest payments due to defense-borrowing (i.e., interest expenditures need to be saved somewhere else in the budget).

https://www.bruegel.org/analysis/can-germany-afford-take-most-defence-spending-out-its-debt-brake#footnote2_unywcq6

lucasguttenberg.bsky.social•20 days ago

Sure, interest costs will have to be covered in the budget. But there is no full additionality already because defense costs will be exempted above 1%, almost 10 bn below where defense spending is now, and I assume there will also be slippage on the investment side. Therefore not so clear-cut.

robzaagman.bsky.social•19 days ago

@skyview.social unroll

vicenteolissipo.bsky.social•20 days ago

The irony of the Green's anti-nuclear power policy being one of the dominos tumbling down to German Nuclear Weapons

Posting Rules

Be respectful to others
No spam or self-promotion
Stay on topic
Follow Bluesky's terms of service

Comments

Posting Rules

Reply