Professor Schnitzer, this year the board of directors failed to reach consensus on the common position of the two issues.How he missed his fifth member Rasfeld?
First of all, the new constellation means to us that we have to allocate a lot of work on four shoulders instead of five shoulders. But there are also some positive aspects. In our days when there were only five people, even on controversial issues, there was always a majority. The situation has changed this year. This is why certain things have been discussed in more detail and there is more room for diversity.
The first problem is the debt problem. Unlike other MPs, you and Achim Truger are open to loan financing investment companies. Why do you need it?
Our board of directors agreed that the debt ceiling can be complied with again in 2023 in accordance with the government’s plan. However, the question remains how to deal with the high expenditures required to cope with the transformation. In order to create long-term leeway for this-please note that within the scope of the debt brake-loan financing is necessary. The advantage of an investment company is that it not only has clear tasks but also stable expenditures. Because one reason for the poor progress of investment in recent years is that investment is sporadic, depending on the cash situation. This means that there is not enough capacity-neither the construction company nor the authorities can plan the project. This requires continuity.
The council also has differences on European fiscal rules. What kind of reform will not open the door to excessive debt?
We are not interested in abolishing fiscal rules, they are wise and important. But you must also be realistic. The 60% rule limits national debt to 60% of GDP. For example, Italy’s current debt ratio is 160%. The current 1/20 rule forces Italy to reduce the variance to a limit of 60% each year. To this end, Italy will have to generate a huge surplus-just to pay off its debts. There is little investment left, but a country cannot develop without investment. My impression is that the other two congressmen worry that once the relaxation begins, confidence in fiscal rules will disappear. However, we believe that if the rules are continuously interpreted in a generous way so that they appear as if they have been followed, the credibility will be more affected. Obviously, it is impossible to follow the current form of the rules.
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But will relaxation not destroy any discipline to follow the rules?
If a country knows that it has no chance to abide by the rules anyway, it has no incentive to work hard. In order for countries that are heavily indebted to have a realistic possibility of re-obeying the rules, the transitional requirements should be adapted to their specific circumstances. If the goal is realistic, then countries will once again have the motivation to make efforts.
