Historical agreement
Economists: Financial package brings economic plus and debt mountain
500 billion euros for infrastructure plus loosening of the debt brake. The planned financial package of the Union and SPD is likely to support the economy, but bring great risks – right down to consumers.
Economists expect the planned huge financial package from the Union and SPD to defend and infrastructure a boost for the economy – but also immense side effects. An overview of the possible consequences for the economy and consumers:
Sven Jari Stehn, chief economist Europe at investment bank Goldman Sachs, estimates that the growth of the gross domestic product in Germany by 2027 will increase up to one percentage per year by 2027 by 2027 by 2027.
Financial package driver for economy – and inflation?
Michael Holstein, chief economist at DZ Bank, says that the future government’s future government would increase the stagnant economic output over several years. However, this could go hand in hand with an increase in inflation, driven by higher wages and higher economic demand.
Institute: Germany could be a university state in 2034
Friedrich Heinemann, economist at Zew Mannheim, warns of the loosening of the debt brake. If you add the planned special infrastructure and the planned new debt opportunities for the countries, open a “huge debt window”.
In total, Germany could in the long run in an economic normal situation to be constitutional in accordance with the constitution four percent of gross domestic product. “Germany would quickly join the EU’s university states, and in 2034 the debt-BIP rate will then reach 100 percent.”
The Union and the SPD want to loosen the debt brake for defense spending that is anchored in the Basic Law. In addition, a special fund is to be created for the repair of the infrastructure with 500 billion euros. It should have a term of 10 years.
Financial offensive as a mood for companies
Sebastian Dullien, Scientific Director of the Institute for Macroeconomics and Economic Research (IMK) of the Hans Böckler Foundation, sees the plans “also a real turnaround for financial policy”. This “could be removed many of the brake blocks that the German economy recently prevented”.
According to Dullia, the mood of the companies is likely to lighten up quickly because the site conditions are foreseeable. And Thomas Gitzel, chief economist at VP Bank, says: “They are the right steps. Small-Klein no longer goes in view of the geopolitical developments.”
Consequences for monetary policy and construction interest
The spending of the expenditure could noticeably drive the returns of German government bonds upwards, suspects DZ-Bank chiefs. Because the state would probably have to attract investors with higher interest rates in the event of flood of new bonds.
Since the construction interest on the return of ten -year -old federal bonds is based, the housekeeper would feel in the form of higher credit costs. In addition, the risk of an increase in inflation could “initiate the European Central Bank (ECB)” in spring to reduce interest rates less than previously suspected “.
Foreign trade association: state not a good investor
While the construction industry sees the finished financial package for the infrastructure as a “historical opportunity”, Dirk Jandura, President of the Foreign Trade Association BGA: “The state is a bad investor.” More debts no longer meant competitiveness: “Money does not solve any structural problems.”
dpa
Source: Stern
