Inflation remains high, but relief measures should not be financed by new debt, emphasizes Finance Minister Lindner. Rather, it is necessary to “combat the causes of inflation”. Expenditures and debt should therefore be reduced.
Federal Minister of Finance Christian Lindner has once again strictly rejected financing new debt relief measures to alleviate high inflation. “The debt brake is a requirement of our constitution,” said the FDP chairman in the ZDF summer interview. He couldn’t just make exceptions at will. “The debt brake will be suspended in the event of an external shock that cannot be influenced or foreseen. But now we have been living in the reality of the Ukraine war with its economic effects for some time.”
Most recently, inflation in Germany was 7.5 percent in July, driven by high energy prices, which jumped more than 35 percent year-on-year. Food became more expensive by almost 15 percent. At the same time, inflation was slowed down by government measures such as the nine-euro ticket.
There is also an economic argument against suspending the debt brake again: “Inflation means that the state must do its part to combat the causes of inflation. This is done by reducing its spending and its debt.” Because one of the causes of inflation is the government’s spending policy.
According to the finance minister, the rising interest burden also limited the scope. Unlike in previous years, debt is “no longer free of charge”. The state will soon have to repay debts that it is now taking on. “Not everything that is desirable can be financed,” emphasized Lindner. “Because if we do that with debt, then within a few years we will have to raise taxes just to pay off the debts of the past. We would strangle our economy.”
Lindner defended his tax relief package, which was also criticized in the ranks of the traffic light coalition. On the one hand there are the needy, for whom a lot of money is mobilized, on the other hand “middle of society”. The average annual income is 43,000 euros. “And the people who earn 30,000, 40,000, 50,000 euros are not the top earners.” However, they would be burdened in the coming year if the state did nothing now. “I am not proposing anything other than tax protection against inflation,” said the finance minister.
