German Finance Minister Advocates Moderate Reform in National Spending Cap

Joerg Kukies, Germany's new finance minister, emphasizes realistic and politically feasible reforms to the nation's debt brake, citing current economic constraints. He advocates maintaining fiscal balance while addressing necessary long-term investments, amidst nationwide political disagreements threatening governmental stability.

Joerg Kukies, Germany's newly appointed finance minister, has shared his intentions for a moderate reform of the country's stringent debt brake. In an interview with the Handelsblatt newspaper, Kukies stressed the importance of pragmatism and political consensus on the spending cap adjustments.

Germany's political landscape is currently turbulent, especially concerning fiscal policy. The nation's debt brake, which restricts public deficit to 0.35% of its GDP, faces criticism amid economic pressures stemming from the ongoing conflict in Ukraine. This contention recently contributed to the breakdown of the governing coalition led by Chancellor Olaf Scholz.

Kukies argues that while the debt brake restrains Germany's budget, it ensures fiscal responsibility even during prosperous times. He believes evaluating reform proposals can allow investment in crucial long-term projects while adhering to European debt regulations. Kukies aims to negotiate for extended deadlines on EU spending plans, aligning with upcoming national elections.

(With inputs from agencies.)