The Merkel Era: A Review of Budgetary and Fiscal Policy

The budgetary and fiscal policy record of the Merkel era contains both light and shade. The greatest success is that the stability of Germany’s public finances has suffered less during this period than in other countries, despite the fact that the economy had to weather the two deepest economic crises since the Second World War – the global financial crisis and the coronavirus pandemic. The most important weakness is a declining willingness over time to undertake far-sighted reforms and an increasing tendency to pursue short-term fiscal policies designed to appeal at election time.