Economists criticize the Union's spending mood

Economists criticize the Union's spending mood. The Union wants to move into the federal election campaign with the promise of relief for employees and companies. This emerges from the 138-page draft for the election manifesto. Among other things, the complete abolition of the solidarity surcharge and a shift in the tax brackets for income tax are sought, which should relieve employees. Economists rate the projects differently: "The Union's program contains many correct elements. I also believe that the time is not right now for tax increases," says Gabriel Felbermayr, President of the Kiel Institute for the World Economy (IfW). The lowering of corporate taxation to 25 percent and the abolition of the solos for everyone seemed less urgent to him than before the crisis, also because international tax competition could become less due to the minimum taxation, according to Felbermayr. The IfW boss particularly welcomes the "very strong will to modernize the German administration". That was the bottleneck of the last few years and a real threat to future viability. "The fact that the Union wants to promote transatlantic free trade is a courageous signal that I very much welcome. The commitment to the CO2 price and emissions trading is also gratifying." However, Felbermayr complains that "the Union cannot find any clearer words about pensions". Here there is a risk of very substantial budgetary burdens in the future. "Overall, it is very unclear how the Union intends to finance its projects," concludes Felbermayr. The program seems to contain a move away from the black zero, a quick return to a structural deficit of 0.35 percent will not be possible under the outlined conditions. "In the end, compliance with the debt brake will be difficult even with the Union, especially since there is little desire for austerity measures." Marcel Fratzscher, President of the German Institute for Economic Research in Berlin, is sharply critical of the election program. "The basic idea of ​​the CDU / CSU economic program is to redistribute from the bottom up in the hope that top earners and companies will invest this additional money wisely so that innovation is promoted, good jobs are secured and progress is made on climate change." However, 30 years of neoliberalism would have shown that this model has failed. Despite the relief for companies and top earners in Germany over the past 30 years, private investments have remained weak. "The CDU / CSU's economic program cannot be financed because it provides relief for top earners and companies by 50 billion euros annually, but categorically excludes tax increases," said Fratzscher. The program is based on the principle of hope that an enormous economic boom will flush more tax revenue into the state coffers to pay for these election gifts. In addition, the CDU / CSU economic program ignores demographic change and the associated shrinking tax revenues and higher social spending.