Federalism Commission II: New debt regulations for the federal and state governments - how should the financial relationships between the federal and state governments be re-structured?

In order to reduce public indebtedness in Germany, a fundamental re-structuring of federal-state financial relationships is necessary. In the opinion of Jörg-Uwe Hahn, Hesse FDP and member of the Federalism Commission II, it is necessary, in addition to a strict prohibition on new borrowing, to strengthen the financial autonomy in particular of the federal states but also of the federal government and municipalities. A genuine tax autonomy presupposes also granting legislative competence to the federal states in those areas where they are entitled to tax revenue. For Kai A. Konrad, Social Science Research Centre Berlin (WZB), the federal states, not the federal government, are the main problem. In cases of extreme budgetary restraints, they could look for help from the community of the federal government and the federal states. Many see the reform "as a welcome chance to achieve redistribution profits at the expense of other regional authorities". Eckhard Janeba, University of Mannheim and member of the Scientific Advisory Board of the Federal Ministry for Economics and Technology (BMWI), stresses that constitutional rules for limiting debt are an important instrument for achieving long-term, sound financial policy, He also sees the danger, however, "that decisions on the budget and new borrowing can become a problem of the experts, who are decoupled from an open political discussion. This should be prevented. The proposal of the BMWI Scientific Advisory Board goes in the right direction by not insisting on an identification of the causes of debt and by returning budgetary decisions to political middle ground by qualified majority decisions. Max Groneck and Robert C Plachta, University of Cologne, introduce a reform concept whose components are the introduction of a credit limit rule with obligatory sanction mechanisms, an expansion of the tax autonomy of the federal states, a deficit reduction plan as well as partial debt reduction.