Architect of Germany’s Debt Limit Calls for New Borrowing

The man who invented Germany’s strict limit on new public borrowing has called for a rethink, saying the country should raise billions of euros in debt to invest in new technology, fight climate change and repair its ageing infrastructure, the Financial Times reported. Christian Kastrop, a former official at the German finance ministry, was one of the authors of the country’s “debt brake”, a constitutional requirement that makes it extremely difficult for Berlin to run budget deficits. He now argues for reform of the law to correct years of under-investment and make Germany’s economy fit for the future. Germany’s policy of strict fiscal discipline has delivered a string of budget surpluses but left the country’s physical and digital infrastructure increasingly threadbare. Mr Kastrop is part of a chorus of economists, business leaders and politicians who have called on Angela Merkel’s government to loosen the purse strings. Read more