Germany’s new finance minister says he is open to EU fiscal rules
Germany’s incoming German finance minister emphasized the need for “stability” in the euro area, but said it should be combined with “growth and investment”, which may be a sign of openness to reforming European fiscal rules.
Christian Lindner told reporters on Tuesday that it is “desirable” for the euro zone to “continue to work on the idea of ??stability”. “This is a point in the future [German] The government will review [EU’s] Fiscal rules,” he added.
But he denied that Berlin would now only advocate a return to the austerity policy of the past. He said: “Germany will respect stability while promoting competitive investment.”
At a time when there were growing calls for reform of EU fiscal rules, Lindner became the Minister of Finance. Negotiations are ongoing on how to modify the arrangements set out in the Stability and Growth Pact, which were suspended when the pandemic began.
Italian Prime Minister Mario Draghi said last month that rule reforms are “inevitable” not only because of the high economic costs of the pandemic, but also because of the challenges facing the EU in the future, from climate change to new technologies. Huge investment in semiconductors”.
At the same time, Klaus Regling, the managing director of the Eurozone Relief Fund’s European Stability Mechanism, told the German news magazine Der Spiegel in October that the ratio of public debt to GDP contained in the SGP is The 60% upper limit is “no longer relevant” and should be increased.
Lindner spoke to reporters shortly after the three parties that make up the new German government-the Social Democratic Party, the Green Party and the Liberal Party-signed an alliance agreement to formulate plans and policies for the next four years. The signing paved the way for the election of Olaf Scholz in the Bundestag on Wednesday as the new Chancellor of Germany.
Lindner is the leader of the Liberal Democratic Party (FDP), and many members of the party opposed the Greek rescue plan during the eurozone debt crisis.During the alliance negotiations, he refused to increase taxes and Relaxing Germany’s debt brake, The constitutional ceiling of its new borrowings.
This made him a skeptic among some people in southern Europe, who feared that he would push for the restoration of the EU’s austerity policy after the global financial crisis.
Lindner pointed out that during the pandemic, the debt of the eurozone countries “increased substantially.” “We must avoid… [having] Future fiscal dominance,” he said. This refers to the burden of public finances being so heavy that central bank officials are forced to keep government borrowing costs lower than they are only concerned about inflation.
Lindner also said that the new government will monitor inflation “very closely.” Germany’s inflation rate reached 6% last month, the highest level since 1992, but Lindner pointed out that this may have been triggered by a “one-off effect” related to the pandemic.
He stated that next year he does not intend to raise new loans beyond the 100 billion euros outlined by the outgoing government, and reiterated his intention to re-implement the debt brake that was suspended due to the pandemic from 2023.