Working Paper

Die deutsche Schuldenbremse in der Detailanalyse: Gestaltungsanfällig und pro-zyklisch

In the current economic policy debate the German `debt brake' is often considered as a role model to be followed by the other Euro area member states as a solution to the Euro crisis. It is hoped that the introduction of strict fiscal deficit rules as in the German example would lead to a decisive gain in credibility which would decrease risk premia and alleviate the current liquidity problems of many governments in the Euro area. This working paper argues that such hopes are unfounded. The technical implementation procedure for the debt brake chosen by the German federal government is extremely complex, intransparent and open to political manipulation. In fact, it can be shown that the German government has already used these features in order to create substantial fiscal leeway for its federal budget. However, due to the pro-cyclicality inherent in the technical procedure chosen, the leeway created may soon disappear in the course of a serious economic slowdown or a longer period of economic stagnation. This may well lead to a substantial pro-cyclically restrictive fiscal policy stance right in the middle of a European-wide economic crisis. It is hardly conceivable that such a fiscal policy rule and its technical implementation would be conducive to strengthening the confidence of financial markets.

Der Export der deutschen Schuldenbremse oder ähnlicher Fiskalregeln in die Krisen geschüttelten Euroraum-Staaten halten viele derzeit für einen entscheidenden Beitrag zur Lösung der Euro-Krise. Der vorliegende Beitrag zeigt dagegen, dass solche Hoffnungen angesichts der zahlreichen Schwächen der deutschen Schuldenbremse unbegründet sind.