“The most serious threat for our economic development at the moment is inflation”, emphasises German Finance Minister Christian Lindner in an interview with European news agencies. All European finance ministers are determined to fight this inflation, he says. “This requires a change in our fiscal policies. The expansion of our expenditures during the pandemic and the energy price crisis after the Russian attack on Ukraine has to end.” He certainly recognises the need for this expenditure at those times, says Lindner, “but the priority at the moment has to be fighting inflation, and I see the commission and member states agreeing on this.”
Following this, Lindner answered the question whether defence spending should be removed from the European Stability and Growth Pact respectively from calculation of national deficit with: “Certainly, we have to improve our security capabilities in Europe. The geopolitical situation has changed completely. You probably know that Germany is now enforcing its Bundeswehr again. Having said this, I’m not yet convinced that we need exemptions from the fiscal rules for defense spending. Why am I so skeptical? Simply because capital markets do not distinguish between the motives for making debt. For capital markets, debt is debt and too high debt leads to instability. It is potentially fueling inflation and reduces the sustainability of our public finances.”
The interview is published on the page of the Federal Ministry of Finance.
Dorothee Frank, Head of editorial team