Bavaria’s Budget Dilemma: Debt or Decades-Old Fiscal Discipline?
Markus Söder's government in Bavaria is nearing the completion of the 2026/27 biennial budget. The key question remains: should the state take on debt or stick to its long-standing balanced budget policy? This policy, established in 2003 by Edmund Stoiber, has been a cornerstone of Bavarian finance for over two decades. However, it is now being reevaluated. Erwin Huber, a key figure in Stoiber's government, has suggested that Bavaria should abandon this principle and consider taking on debt to manage current crises. Söder, who was once CSU Secretary General, had previously emphasized the importance of saving for the future. Yet, his upcoming press conference on Tuesday at 1 p.m. is expected to shed light on whether the government will maintain this stance. The balanced budget policy has seen some rollbacks under Söder's predecessors, including extended workweeks for civil servants and the introduction of tuition fees for students. Meanwhile, voices from both sides of the debate have emerged. While Thomas Goppel, former science minister, demands a thorough justification and clear limits if the budget is exceeded, others like Kurt Faltlhauser, former finance minister under Stoiber, warn against new borrowing, deeming it a 'major political mistake'. Christa Stewens, former social affairs minister, also cautions against squandering future generations' future. Markus Söder's government is set to decide on the 2026/27 biennial budget, with the possibility of deviating from the long-standing balanced budget policy. The outcome of this decision will significantly impact Bavaria's financial future, with various political figures offering differing opinions on the matter.
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