Economic stimulus package: Sometimes long negotiations also help…

Many participated in the discussion, the wish list was long. The interests of the participants in the negotiations were quite far apart. As a result, the coalition partners‘ talks lasted much longer than planned and there was a fear that a bad compromise would be reached. But all in all it turned out to be a pretty good compromise.

The fact that they did not go for the „scrapping premium 2.0“ and instead opted for a temporary reduction in VAT is a good sign. It is not lobbyism that has prevailed here, but economic rationality. This measure will support all major purchases, including, of course, the purchase of cars. But no one sector is given preferential treatment. It is a simple and fast-acting measure that also has a desired distribution effect. After all, the burden of excise duties is heaviest for lower-income households.

The various tax measures in favour of businesses are also to be welcomed. Among other things, the possibilities of tax loss carry-back and depreciation have been extended. The reduction of the EEG levy on the electricity price from 2021 onwards helps companies and households. This too is a good signal, as is the relief for local authorities in the event of trade tax losses.

It was to be feared that there was no way of getting off the „child bonus“ that had been promised earlier. This is the much-cited watering can, the effect on consumption will be negligible. Here a more targeted help for needy households would have been better, but this could probably not be implemented in the short time available.

All in all, therefore, the programme should be welcomed from an economic point of view. At just under 4% of GDP, it has a substantial volume and should provide a noticeable boost to the economy. We could use it!

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