For politics from 2021 onwards, it will be decisive whether the debt brake remains in place or not. If this persists, most of the debt incurred now will have to be paid back for the most part in the next few years. That means stresses will come on the population.
https://www.bundesfinanzministerium.de/Content/DE/Glossareintraege/S/Schuldenbremse.html?view=renderHelp
DEBT BRAKE
The debt brake stipulates that the budgets of the federal and state governments are basically to be balanced without income from loans. This regulation is anchored in Article 109 of the Basic Law.
GENERAL
The aim of the debt brake is to ensure the long-term sustainability of the federal and state budgets and the financial scope for the fulfillment of governmental tasks.
Article 109 of the Basic Law prescribes the principle of a balanced budget without income from loans for the federal and state governments. For the federal government, the debt brake is specified in Article 115 of the Basic Law:
As part of the principle of balanced budgets, Article 115 of the Basic Law grants the Confederation a very limited amount of structural leeway, i.e. independent of the economic situation. The maximum permissible structural net borrowing is limited to 0.35 percent of the gross domestic product. Due to the considerable burdens on public finances caused by the economic and financial crisis at the time the debt rule started in 2011, this upper limit will only apply from January 1, 2016; until then, the structural deficit of the financial year 2010 had to be reduced in steady steps.
Cyclical effects are taken into account symmetrically: In times of economic downturn, in which the production factors are under-utilized, the maximum permissible net borrowing is increased due to the economic situation, in turn it is reduced in good economic phases.
Using a control account, compliance with the rule is also checked during budget implementation. If a negative threshold value is exceeded on this account, the burden exceeding the threshold value is due to the economic cycle through a lower upper limit for net borrowing in the following years.
An exemption for natural disasters or other extraordinary emergency situations that are beyond the control of the state and significantly impair the state's financial position ensures that the federal government has the necessary capacity to act to cope with the crisis. At the same time, a repayment plan must be decided that provides for a repayment of the exceptionally approved borrowing within a reasonable time.
https://www.bundesfinanzministerium.de/Content/DE/Glossareintraege/S/Schuldenbremse.html?view=renderHelp
DEBT BRAKE
The debt brake stipulates that the budgets of the federal and state governments are basically to be balanced without income from loans. This regulation is anchored in Article 109 of the Basic Law.
GENERAL
The aim of the debt brake is to ensure the long-term sustainability of the federal and state budgets and the financial scope for the fulfillment of governmental tasks.
Article 109 of the Basic Law prescribes the principle of a balanced budget without income from loans for the federal and state governments. For the federal government, the debt brake is specified in Article 115 of the Basic Law:
As part of the principle of balanced budgets, Article 115 of the Basic Law grants the Confederation a very limited amount of structural leeway, i.e. independent of the economic situation. The maximum permissible structural net borrowing is limited to 0.35 percent of the gross domestic product. Due to the considerable burdens on public finances caused by the economic and financial crisis at the time the debt rule started in 2011, this upper limit will only apply from January 1, 2016; until then, the structural deficit of the financial year 2010 had to be reduced in steady steps.
Cyclical effects are taken into account symmetrically: In times of economic downturn, in which the production factors are under-utilized, the maximum permissible net borrowing is increased due to the economic situation, in turn it is reduced in good economic phases.
Using a control account, compliance with the rule is also checked during budget implementation. If a negative threshold value is exceeded on this account, the burden exceeding the threshold value is due to the economic cycle through a lower upper limit for net borrowing in the following years.
An exemption for natural disasters or other extraordinary emergency situations that are beyond the control of the state and significantly impair the state's financial position ensures that the federal government has the necessary capacity to act to cope with the crisis. At the same time, a repayment plan must be decided that provides for a repayment of the exceptionally approved borrowing within a reasonable time.
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