Fiscal council boss unveiled: government ignored warnings, deficit exploded!

Fiscal council boss unveiled: government ignored warnings, deficit exploded!

Euroraum, Europa - fiscal council boss Christoph Badelt presented a worrying record of budget development in ZIB2 on April 11, 2025. He sharply criticized the past government and accused her of systematically making wrong decisions. The state deficit in particular exceeded expectations with a forecast new debt of 4.4 percent. Badelt noted that the desired three percent goal for the deficit was not accessible and an EU deficit procedure was imminent if no measures are taken.

In order to stabilize the financial situation, Badelt demands drastic savings of 12 billion euros. However, this is considered "practically extremely difficult". In the short term, he sees hardly any other solution than to apply to public salaries and pensions, and demands more “modesty” in these areas. Tax increases are under discussion, but encounter considerable resistance in politics.

increasing expenses burden the future

The increasing expenditure for 2024 are seen as an additional burden for the 2025 budget. The fiscal council is confirmed in its assessment that the originally planned 6.4 billion euros were unrealistic. Badelt emphasizes that the last government willingly ignored the warnings of the fiscal council and expensive promises while the income decreased. He commented provocatively: "You wanted everything at once - that is now revenge!"

This development is not to be considered isolated, since the data from Eurostat prove that the public deficits in the euro area in 2022 were 3.7 percent of GDP and in 2023 slightly dropped to 3.6 percent. The public debts also recorded a decline to 88.6 percent of GDP in the euro area at the end of 2023. Data show that all EU member states except Cyprus, Denmark, Ireland and Portugal have a deficit.

public finances in long -term comparison

In the context of public finances, it is relevant to note that government spending in the euro area for 2023 made 50.0 percent of GDP. In comparison, state revenues were 46.4 percent. These numbers also reflect the trend that the ratio of expenses and income to GDP has dropped compared to 2022.

The quarterly cash statistics, which enables comprehensive insights into the public general budget, shows income, expenses and the use of reserves to cover the financing balance. These statistics illustrate the challenges that the fiscal council and the current government must manage to ensure the financial stability of the country.