Public Debt in Germany: At the Turning Point or Ever-Increasing?

FiFo-CPE Discussion Paper No. 08-2

33 Pages Posted: 17 Mar 2008

See all articles by Clemens Fuest

Clemens Fuest

ifo Institute – Leibniz Institute for Economic Research at the University of Munich; Ludwig-Maximilians-University, Munich; Center for Economic Studies (CES)

Michael Thöne

FiFo Institute for Public Economics, University of Cologne

Date Written: 2008

Abstract

Since 1970 public debt in Germany has risen dramatically. The debt growth has neither been stopped by the constitutional deficit limit, nor by the European Stability and Growth Pact. At the moment, the cyclical upswing triggers increasing tax revenues and diminishing deficits. Yet this does not mean that fiscal fundament is sustainable. What are the chances for a structural consolidation of public finances? Which institutional reforms must be envisaged? Can these changes be accomplished in the planned second round of the reform of intergovernmental fiscal relations?

Keywords: public debt, fiscal sustainability, reform of intergovernmental fiscal relations

JEL Classification: H62, H68

Suggested Citation

Fuest, Clemens and Thöne, Michael, Public Debt in Germany: At the Turning Point or Ever-Increasing? (2008). Available at SSRN: https://ssrn.com/abstract=1106119 or http://dx.doi.org/10.2139/ssrn.1106119

Clemens Fuest (Contact Author)

ifo Institute – Leibniz Institute for Economic Research at the University of Munich

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Munich, DE 81679
Germany
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Ludwig-Maximilians-University, Munich ( email )

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Munich, DE 80539
Germany

Center for Economic Studies (CES) ( email )

Schackstr. 4
Munich, DE 80539
Germany
++89 2180-2748 (Phone)
++89 2180-17845 (Fax)

Michael Thöne

FiFo Institute for Public Economics, University of Cologne ( email )

Wörthstr. 26
Cologne, D-50668
Germany
+49-221-1397510 (Phone)
+49-221-13975111 (Fax)

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