The German economy is shrinking – also because of the debt brake

In order to counteract the slump, the Düsseldorf-based IMK is calling for more government investment and a reform of the debt brake, which only allows a small amount of new debt. “While an easing of monetary policy is in sight, there are currently no signs of a reversal of German fiscal policy in line with the economic situation,” it said. It is necessary to expand infrastructure investments and promote transformative investments directly and through cheaper depreciation options. In this context, the price of electricity should also be reduced by the federal budget covering network fees in order to secure domestic production and support the move away from fossil fuels in transport and heat generation in households.