German investments hampered by defence, social costs – minister
Defence, social spending, and interest payments are the ‘big blocks’ constraining the German budget, stated German Finance Minister, Christian Lindner, on Wednesday at the Humboldt Forum in Berlin, as reported by Reuters.
He emphasised these areas as the major challenges in managing the federal budget. As the 2025 budget is being planned, some ministries are advocating for increased spending, while the finance ministry is emphasising the importance of fiscal consolidation.
Lindner pointed out that the geopolitical situation will necessitate more investment in security in the coming decades, which will limit the capacity for investment in other sectors.
However, Lindner sees potential for adjustment in the social sector. He believes that increasing employment will not only reduce public spending but also improve life opportunities for individuals.
Lindner reaffirmed his opposition to new debt, citing the increased burden of interest payments. He revealed that in 2021, €4 billion ($4.33 billion) was paid in interest to international capital markets, a figure that has risen to nearly €40 billion this year.
Lindner expressed a preference for investing taxpayers’ money directly into education, describing this approach as “sustainable financing of the state.”
He emphasised that every billion in additional debt is ultimately paid for by the taxpayers.
