Federal Finance Minister Christian Lindner advises the EU countries not to use a suspension of the debt rules for 2023 proposed by the EU Commission. “One can become dependent on national debt, and we must end the addiction to more and more debt as quickly as possible,” said Lindner on the sidelines of a meeting of the finance and economics ministers of the euro countries on Monday. Inflation should no longer be given financial leeway. “We advise you not to make use of the opportunity to take on a lot of debt again next year.”
The EU Commission has proposed that the Stability and Growth Pact should not be fully reinstated until 2024, pointing to the uncertainty caused by the war in Ukraine, energy prices and bottlenecks in the supply chains. The debt and deficit rules were suspended during the Corona crisis and should actually apply again from 2023. The EU Commission’s proposal will now be presented to the member states.
Lindner said Germany would not make use of the stability pact’s general fallback rule. “Germany will return to the debt brake of our Basic Law next year.”
The Stability and Growth Pact stipulates that EU countries should not borrow more than 60 percent of economic output. Budget deficits are to be capped at 3 percent of gross domestic product. Many countries are exceeding these limits, largely because they borrowed heavily to prop up the economy during the pandemic.
Germany is also above these thresholds with a debt of 69 percent of GDP last year and a deficit of 3.7 percent, according to a report by the commission.