The “turning point” announced by the federal government is limited to unbridled spending dynamics and an ever-increasing mountain of debt. This will be reflected in a consolidation of currency devaluation and economic stagnation if politicians do not act.
Dear FOCUS Online readers,
finally, one is inclined to say: this week the ECB announced that it would raise interest rates very cautiously and in small steps over the course of the year. Above all: As announced, the ECB is ending the purchase of government bonds. In the future, the euro states will have to borrow again on the normal credit markets.
That’s exactly what they seem to want to do. The level of debt in the euro zone continues to rise, and hardly any country is still complying with the rules of the Stability and Growth Pact. It was decided almost exactly 25 years ago in order to create scope in economically good times that can be used in crisis situations.
However, if more and more debt is incurred even in times of stable growth rates and high tax revenues, then major shocks such as the corona pandemic or the military build-up that was recognized overnight as necessary can only be financed with dubious methods: in the case of Corona by a EU borrowing amounting to several hundred billion euros, right on the verge of what is permissible, in the case of the Bundeswehr through an exception to the exception to the debt brake of the Basic Law in the Basic Law itself.
In addition, there are so-called “reserves” from the refugee crisis of 2017 and unused credit authorizations from the federal corona fund, which together account for more than 100 billion euros in additional federal debt. In two budget years, the current federal government incurs more debt than all federal governments combined in the first 40 years of the history of the Federal Republic of Germany.
Friedrich Merz is a lawyer and politician (CDU). From 1989 to 1994 he was a member of the European Parliament and from 1994 to 2009 of the German Bundestag. There he was chairman of the CDU/CSU parliamentary group from 2000 to 2002. In 2018, Merz ran unsuccessfully for the presidency of the CDU, just like in 2021. Only at the third attempt was he elected party leader at the CDU party conference on January 22, 2022. Now Merz is again a member of parliament and chairman of the CDU/CSU parliamentary group.
In his “Mail von Merz” the CDU politician analyzes and comments on current political developments in Germany and beyond for the readers of FOCUS Online.
The federal government’s “turning point” is thus exhausted in ever increasing debts and an otherwise completely unchecked spending dynamic, especially in social policy. At the same time, the remnants of the labor market reforms of the years 2005 to 2010 are finally cleared away, the only thing that remains of “demanding and promoting” is funding with ever-increasing payment amounts – even in the case of a stubborn refusal to return to the labor market.
High debt, a soaring money supply, a stagnant labor market, and a growing shortage of workers at virtually every skill level are a dangerous brew. And all this with a finance minister who belongs to the FDP!
We will pay a high price for this as a society, first in a deepening inflation, then in a stagnation of our economy, which has the potential for a deeper recession. Getting back on the path of price stability and economic growth, both of which we need in order to achieve the great transformation to climate neutrality, will be very arduous and, in an aging society, will become increasingly difficult to achieve by the day.
Within a very short time, the “progress coalition” in Berlin has turned into a government of hesitation and hesitation, daily arguments and a ghost ride in economic and financial policy. Only when it comes to spending money, there seems to be no stopping at all. This policy is reflected in the inflation rate.
Despite everything, I wish you a nice weekend!
Yours Friedrich Merz
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