Germany's coalition government has unveiled a package of changes to the pension, tax and labor systems. Chancellor Friedrich Merz claims that the package is intended to boost growth, jobs and competitiveness.
The €500 billion special fund for military spending had a big impact. For example, mortgage interest rates immediately jumped by 0,5%.
You cannot fix the German economy by fiddling with income taxes a little. There is also lots of things the German government cannot do (e.g., ECB interests rates, Volkswagen business strategy).
I believe the biggest lever they have is to build residential areas to reduce housing costs. That shows up in the reform package but only in vague terms:
Wohnungsbau: Es wird eine Wohnungsbaugesellschaft für bezahlbares Wohnen
(WBG) errichtet. Ziel ist es, vermehrt Wohnungen im bezahlbaren Preissegment zu
bauen, wo der Wohnungsmarkt auf Dauer nicht ausreichend bezahlbaren Wohnraum
bereitstellt. Die WBG soll den sozialen Wohnungsbau sowie den industriellen
Hochlauf seriellen Bauens unterstützen und insbesondere in Regionen mit
nachgewiesenem Wohnungsmangel tätig werden.
So they want to create some kind of association to build cheap housing. No timeline, no budget, no goals.
I fully agree with you. The housing market for low cost housing is failing and requires government intervention. Maybe the details of this measure will be published once the parliament works out the laws. Budget and timeline, sounds like that’s the parliament’s job to decide.
Well, government intervention is actually really complicated and that’s why lots of bureaucrats learn from past failures and try to figure out how to do better.
The €500 billion special fund for military spending had a big impact. For example, mortgage interest rates immediately jumped by 0,5%.
You cannot fix the German economy by fiddling with income taxes a little. There is also lots of things the German government cannot do (e.g., ECB interests rates, Volkswagen business strategy).
I believe the biggest lever they have is to build residential areas to reduce housing costs. That shows up in the reform package but only in vague terms:
So they want to create some kind of association to build cheap housing. No timeline, no budget, no goals.
I fully agree with you. The housing market for low cost housing is failing and requires government intervention. Maybe the details of this measure will be published once the parliament works out the laws. Budget and timeline, sounds like that’s the parliament’s job to decide.
The previous government also tried to fix it and the one before as well. They all failed. So I don’t expect the Merz gang to achieve anything.
Well, government intervention is actually really complicated and that’s why lots of bureaucrats learn from past failures and try to figure out how to do better.