The swiss debt brake — ten years on

AbstractAccess to the domestic market is nowadays the trump card of trade diplomacy. The larger the domestic market, the more effective it is. The euro is thus the decisive pillar of the European single market. The German debt brake is incompatible with the long-term stability of the euro. For as long as it applies, full employment can never be achieved in the eurozone as a whole. Under currentfiscal policy, full employment would require unrealistically high export surpluses. A euro doomed to underemployment will collapse. Hence, the international fiscal order must also be applied among the nation states in the euroarea. Germany’s resulting obligations offer an opportunity for a German demographic renewal by aggressively encouraging the immigration of skilled workers.

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Debt Limits in Constitutional Law : The ‘Debt Brake’

Legal Challenges in the Global Financial Crisis : Bail-outs, the Euro and Regulation ◽

10.5040/9781474202114.ch-004 ◽

2014 ◽

Keyword(s):

Constitutional Law ◽

Debt Brake

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Schuldenbremse oder Schuldenschranke für die deutschen Bundesländer?

Review of Economics ◽

10.1515/roe-2008-0205 ◽

2008 ◽

Vol 59 (2) ◽

Cited By ~ 13

Author(s):

Max Groneck ◽

Robert C. Plachta

Keyword(s):

Public Debt ◽

Simulation Analysis ◽

Golden Rule ◽

Simulation Method ◽

Economic Approach ◽

Debt Brake ◽

German Länder

SummaryThis paper studies two alternative budget rules to overcome the shortcomings of the current laws for the German Länder: The Swiss debt brake as well as a version incorporating a golden rule presented by the German Council of Economic Experts. A simulation analysis reveals the necessary consolidation path, the loss of benefits, and the recursive development of public debt. Extending the standard simulation method we present a politico-economic approach considering the budget rules in their full complexity. The Swiss debt brake yields stronger restrictions on public debt than the version incorporating the golden rule. Yet applying the simulation to both Länder and their municipalities leads to contrasting results.

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A New Rule: The Swiss Debt Brake

IMF Working Papers ◽

10.5089/9781451843651.001 ◽

2002 ◽

Vol 02 (18) ◽

pp. 1 ◽

Cited By ~ 16

Author(s):

Stephan Danninger ◽

Keyword(s):

Debt Brake

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The ‘German Way’ of Curbing Public Debt

European Constitutional Law Review ◽

10.1017/s1574019615000048 ◽

2015 ◽

Vol 11 (01) ◽

pp. 30-54 ◽

Cited By ~ 3

Author(s):

Alexander Thiele

Keyword(s):

Financial Crisis ◽

Public Debt ◽

Historical Background ◽

Wrong Answer ◽

Debt Brake ◽

Economic Problems ◽

Fiscal Compact ◽

Germany Introduction ◽

Balanced Budget Rule ◽

Balanced Budget

Public debt: relevance for funding of modern states – Keynesian revolution – Consequences of the financial crisis in Germany – Introduction of the debt brake and Fiscal Compact – The constitutional debt brake: structure and exceptions of the balanced budget rule, four deficiencies of the debt brake – The Fiscal Compact: historical background and structure of the balanced budget rule – Sufficient implementation of the balanced budget rule in Germany? – Constitutionality of the Fiscal Compact? – Austerity as the wrong answer for solving the current economic problems

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