ifo President Fuest: German Budget Agreement a “Step in the Right Direction”

The ifo President Clemens Fuest has praised the German government’s agreement on the 2024 budget as a “step in the right direction.” “Nevertheless, some questions remain unanswered. We should all be glad that the traffic-light coalition hasn’t taken the easy route of declaring a budget emergency but has instead cut spending, especially subsidies, and also increased environmental taxes such as the carbon price somewhat more. This maintains the incentives for protecting the climate.” The government has opted for a different form of borrowing for the planned Deutsche Bahn investments. “However, the question remains as to whether the necessary level of investment can be made in the coming years.”