Propositions made by the Commission have already been put forward.
In a significant move, the Social Democratic Party (SPD) parliamentary group has published a Position Paper, which focuses on Intergenerational Justice and Fiscal Policy. The key objective of this paper is to combine responsible fiscal policy in the present with intergenerational solidarity in financing major future tasks.
The Position Paper proposes reforming the debt brake to allow more fiscal scope for urgently needed investments, while still adhering to the debt brake principle. This reform aims to create a new fiscal future deal by enabling an expansion in public investment, particularly in infrastructure and defense, without abandoning fiscal discipline.
The SPD's reform seeks a pragmatic balance between fiscal prudence and enabling sustained future investments needed for economic and social challenges. The paper maintains the debt brake as a guiding fiscal rule but makes it more flexible. It allows increased borrowing capacity targeted at future-oriented investments crucial for sustainability and economic growth.
Addressing intergenerational justice is a primary concern. The paper aims to balance current investment needs with long-term fiscal responsibility. The Position Paper does not specify the nature or scope of the future investments it advocates for but emphasises the need for a strong and secure future for all.
The SPD's proposals align with recent changes to the debt brake rule passed in Germany’s parliament, which permit a substantial ramp-up in infrastructure and defense spending under controlled conditions. The rigid rules of the current debt brake are seen as posing a wealth risk for current and future generations.
The SPD federal party conference took place in December 2023, where this Position Paper was presented. The Budget 2024 is a key topic in the Position Paper, and the new fiscal future deal will focus on reforming debt rules. The Position Paper does not express a stance on whether the current debt brake should be maintained or replaced.
The new fiscal future deal aims to provide sufficient room for strong future investments. The SPD aims to initiate a process for developing key points for a new fiscal future deal, ensuring a comprehensive approach to addressing the economic and social challenges of tomorrow.
- The SPD's Position Paper on Intergenerational Justice and Fiscal Policy, presented at the federal party conference in December 2023, proposes reforming the debt brake to accommodate investments in infrastructure and defense while maintaining fiscal responsibility, aligning with recent changes in the debt brake rule in Germany's parliament.
- The SPD's new fiscal future deal, focused on the Budget 2024, aims to strike a balance between fostering business growth, preserving politics' financial stability, and ensuring general-news coverage of intergenerational justice, by providing enough fiscal scope for future-oriented investments without compromising on fiscal discipline.
