Overview
- Monika Schnitzer, chair of the German Council of Economic Experts, echoed the Federal Audit Office’s warning that core federal functions could be unfunded from 2029 under current policies.
- For 2026, she expects a modest upswing of roughly 0.8% to 1.3% growth driven by state spending.
- She observes that expenditures have been moved into newly created special funds, which frees space in the core budget but does not resolve the looming structural shortfall.
- To close the projected gap, she says the government may eventually need to roll back recent measures or even consider tax increases.
- Her prescriptions include faster planning and approvals, targeted investment in technologies such as AI, biotech, pharma and autonomous driving, and pension reforms that extend working lives, moderate increases by focusing on inflation, and add capital-funded elements.