Berlin. Economic advisor Achim Truger has described the German government's budget as a "genuine austerity budget," telling the business magazine Surplus that core spending—apart from defense and debt servicing—shows almost no real growth. Even climate protection measures are facing cuts.
Germany's austerity budget sparks warnings over financial strain on families
He also warned that there is little room for income tax reform, stating that "there is absolutely no scope for costly tax cuts." Truger criticized the new sugar tax as well as increases in tobacco and alcohol duties, arguing that these measures disproportionately burden low-income households.
Given the escalating conflict in Iran, he questioned whether the government might yet be forced to revise its budget. If tensions fail to ease soon, he said, Berlin should counter with a stimulus package and trigger the debt brake's emergency clause. Truger added that the federal government is so consumed with its own affairs that the "drastic financial crisis facing local authorities is being almost entirely ignored."
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