Wednesday November 24th 2021
New coalition is in place
Economist Fratzscher: Traffic light contract “ambitious”
The SPD, Greens and FDP are committed to the debt brake, want to leave the fossil fuel age behind and increase the minimum wage to twelve euros. The coalition has big plans, said DIW boss Fratzscher. However, it is unclear how the investments are to be leveraged.
Economist Marcel Fratzscher sees the coalition agreement as a “promising start”. He thinks it is “both balanced and ambitious,” said the head of the German Institute for Economic Research (DIW) in an interview with ntv. One finds in the contract the signature of all three parties and a “triad of climate protection, digital transformation of the economy and the state as well as a strong social component”.
The traffic light coalition has big plans. The contract has two major strengths, said Fratzscher. On the one hand, there is climate protection and, on the other hand, the labor market and social affairs area. The weakest part, however, is economic policy. “I would have liked more new plans,” said Fratzscher.
On the other hand, it is “extremely wise” to place the area of climate protection in the Ministry of Economic Affairs. “Good economic policy is good climate policy,” said the DIW boss. It is ambitious to lead “such a large ministry with such large tasks”. It is certain that the Greens co-boss Robert Habeck will lead the department. Fratzscher emphasized that it is now important that the German economy also manage this transformation,
It is right that the debt brake should be adhered to again in 2023. But it is unclear how the announced investments are to be financed, criticized Fratzscher and added: “I am missing the specific statements on how the announced investments will be managed.” The coalition will soon have to say whether it wants to “get past the debt brake through shadow budgets.”