What to do with the budget surplus?

Germany recorded a budget surplus for the second year in a row in 2016 - this time amounting to 6.2 billion euros. Among other factors this is a result of unexpected growth: its GDP rose by 1.9 percent in 2016. Finance Minister Wolfgang Schäuble wants to use the money to settle debts but the CSU and SPD have other plans. Commentators are likewise at odds over how Germany should spend its extra cash.

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Frankfurter Allgemeine Zeitung (DE) /

High time for tax cuts

The Frankfurter Allgemeine Zeitung calls for tax cuts for the people, explaining that upping investments as proposed by the SPD isn't such a viable option right now:

“How is this supposed to work when we're talking about last year's budget here? Budget funds that haven't been spent lapse at the end of the year. You can't build roads or renovate schools retroactively. The year has ended and that's that. ... Since only a fraction of the money earmarked for investment is actually being spent right now it doesn't make sense to reserve even more money for investments. At the same time the year that has just ended shows how healthy the federal and state budgets are. The state premiers aren't as needy as they always profess to be in order to cajole the federal state into giving them more money to deal with the refugee crisis. ... At the same time the taxpayers' burden is at its highest level since reunification. All this shows that it's high time to lighten the citizens' burden.”

Deutschlandfunk (DE) /

Only settling debts can move Germany forward

Tax cuts make as little sense as additional investments in the current situation, Deutschlandfunk argues:

“Schäuble and the CDU want to pay off debt, the CSU wants to lower taxes and the SPD wants to increase public investment. Of all three proposals the first is the best. … For a tax cut à la CSU 6.2 billion euros is simply not enough, and it's also unclear whether the surplus is long-term, as tax reductions would be. Then there's the fact that there isn't a vociferous debate about bringing down taxes in the country; the nation has other problems right now - cue internal security. A cunning politician like Schäuble will opt to wait a while and use tax cuts as bait for the next election. And the SPD's proposal of increasing investments is nothing but an attempt to hold out the prospect of more money. The Social Democrats wouldn't be able to spend it because there are too few plans for projects that are ready to be built, and also too few planners. So the only viable option is settlement of debts.”

La Stampa (IT) /

Invest budget surplus

For its part La Stampa hopes that Germany will opt to increase investments and export the German growth model to the rest of Europe:

“If the data of 2016 is confirmed in 2017, the rest of Europe can rightly expect the Union's strongest economy to lead the way for the other economies. The times of German 'sermons' are over, perhaps the phase in which the rest of Europe benefits from Germany's impressive financial resources and technological skills can begin now. If there's one thing Germany can be accused of, it's that it has been too wary of allowing the 'good' euros in its state budget to be used to finance the 'nasty' extravagance of others while at the same time defending a few grey areas in its own banking system. Everyone would benefit if Germany stopped this Manichean behaviour - starting with the Germans.”