Zero fiscal space

Germany’s federal budget could lose all disposable fiscal space within ten years, a new indicator warns. Without reforms to the budget and the debt brake, and without bringing more people into the labor market, future governments will have no room to maneuver.

The baseline is wrong

In this paper, we show that DSAs currently largely ignore economic impacts resulting from climate damages, as well as from the climate policies needed to satisfy the emissions constraint set by European climate targets.

A controversial investment

The US semiconductor company Intel is planning to build two ultra-modern chip factories near Magdeburg. This project was promised the largest industrial policy subsidy that the German government has ever approved for an individual company: almost 10 billion eu-ros. Is this money well-spent? To answer this question, we developed guidelines for the evaluation of government investments (BESTInvest). This paper sets out these guidelines and applies them to Intel-Magdeburg. Our conclusion is that the subsidy is controversial.

Beyond Maastricht

Strengthening Europe’s sovereignty has become a much-debated policy goal. This paper adds three arguments to ongoing discussions.

How to finance Germany’s modernisation

Germany needs 782 billion euros in additional public spending for its modernisation by 2030. German politicians have so far lacked a reliable financing framework for this purpose; there are constant discussions around spending cuts or a constitutional reform of the debt brake. Neither strategy can realistically be implemented in the short term. In this policy paper, we show that many of the needs identified can in fact be financed without amending the Basic Law, and thus be addressed in the short term: the debt brake already provides options to take on debt for productive expenditure as part of the cyclical component and financial transactions.