Volker Wieland and Kronberger Kreis: Coalition agreement slows down Germany ("Frankfurter Allgemeine Sonntagszeitung")

The economists of the so-called Kronberger Kreis, among them Volker Wieland, have expressed their disappointment about the coalition agreement between the Union parties and the SPD. The agenda of the future federal government may paralyze economic initiative and hamper technological innovation, the six economists write in an opinion-piece for the "Frankfurter Allgemeine Sonntagszeitung".

The Professors Lars Feld, Clemens Fuest, Justus Haucap, Heike Schweitzer and Volker Wieland critize that the coaltion agreement is not suitable for strengthening Germany in view of the economic challenges of the future, such as digitalization, energy, the demographic change as well as the international tax competition and the international competition for business locations. Regarding European policy, the economists even notice a paradigm shift.

According to the economists, there is no master plan of digitalization. Digitale business models were hindered or prohibited when interests of well-etablished suppliers were touched upon, which was the case nearly everywhere. There was no coherent energy concept neither a long-term strategy regarding demographic change. The government should react by consequently increasing the retirement age, the economists argue. However, the government plans to even put another burden on the pension system by introducing a basic pension and offering more financial means for mothers of three or more kids born before 1992.

On the other hand, there are no tax reliefs planned for companies, which face a stronger international tax competition with tax cuts in the United States and further announcements in France and Great Britain.

The abolition of the solidarity surcharge for 90 percent of the tax payer is not sufficient either, according the the economists of the Kronberger Kreis. In 2019, the solidarity surcharge will even lose its constitutional basis, the economists point out.

On the European level, the economists state a paradigm shift from the principle of subsidiarity and liability to more solidarity and higher payments to the EU budget.



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