BVR welcomes proposals to revise the debt brake - more scope for state investments

Von NAG Redaktion

In Berlin, the proposal of the Council of Experts (SVR) ensures discussions to revise the debt brake. The Federal Association of German Volksbanks and Raiffeisenbanken (BVR) fundamentally welcomes the suggestions because they reconcile a flexible financial policy and the long -term stability of state finances. The BVR President Marija Kolak emphasized that the proposed measures made it possible to push urgently needed state investments.

Local effects in Berlin could be noticeable due to the proposed increase in the federal debt. If the state debt rate is less than 60 percent, this would lead to an additional annual household scope of 23 billion euros. In the event of a debt rate of just over 60 percent, the scope would provide an increase of 5.4 percent annually. This could affect the financing of infrastructural measures in Berlin.

The proposal of the economic methods for reforming the debt brake also provides for a transition phase after the application of the exceptional clause, in which a gradual reduction in budget deficit is planned. Something larger household scope should be provided if the state debt rate is at a low level.

It is important for the citizens of Berlin to understand how these proposals could affect the economic development of their city. Investments in the infrastructure, education and social projects could be positively influenced if the additional household scope is used to finance urgently needed measures. On the other hand, it must also be borne in mind that higher public debt could have long -term effects on the economy and public finance.

It remains to be seen whether the SVR's suggestions for revising the debt brake are taken up and implemented in the political debate. However, the effects on Berlin and other cities in Germany would not have to be underestimated, since state investments and financing models can have a significant impact on the local economy and quality of life of the citizens. It will be shown to what extent the proposals are implemented and what effect they will have on the Berlin population and economy.

table with additional information:

| State debt quota | Household scope |
| ——————— | ——————— |
| Under 60 percent | 23 billion euros |
| Slightly over 60 percent | 5.4 % annual increase |


Source: bvr Federal Association of the German Volksbanken and Raiffeisenbanken / OTS