New Start Marked by Major Challenges
The cover story in the ifo Annual Report 2021 provides an overview of the challenges facing this legislature as well as the ifo Institute’s recommendations.
ifo Institute Proposals for the New Legislative Period
Alongside the pandemic, the main topic of 2021 was Germany’s federal election in September. After
Germany’s new government must find bold, innovative ways of answering these questions. This task is not made any easier by the fact that the coronavirus pandemic has demanded so much attention and tied up so many financial resources over the past two years. Germany had to take on considerable debt to cushion the economic consequences of the pandemic. As a result, the financial scope for new government spending is narrow.
An election marks a key turning point, especially when it becomes clear that a new administration will take office. It is crucial that such a fresh start be carefully prepared. Complex economic and policy challenges need to be tackled with targeted measures. The new coalition’s economic and fiscal policies must stabilize the fragile economy from the effects of the coronavirus crisis and initiate economic growth.
Last year, ifo experts used their own scientific findings to develop an economic policy agenda for the new legislative period. This agenda is linked to the fundamental and long-term goals of the social market economy – securing prosperity, equality of opportunity and inclusion, sustainability, and economic stability. The Institute drew up proposals, in particular for tax and fiscal policy, but also for “uncharted territory” – in other words, topics such as policy on international economics and on education, which were sidestepped during the campaign.
Read the full article with the following topics in our 2021 Annual Report:
- Creating a Growth-Friendly Tax and Financial System
- Rethinking Climate Policy
- Exploit Potential: Expand Education
- For Robust Supply Chains: Avoid Bottlenecks
- Driving the Digitalization of the Economy and Administration Forward
Topic
Economic Policy Agenda 2021–2025
The starting position of Germany’s first post-Merkel government is not an easy one. Even before the coronavirus crisis, there were considerable challenges ahead. What should the next federal government’s economic and financial policies focus on?
