Wirtschaftsweise: Sachverständigenrat fordert Kürzungen und Steuererhöhungen – ansonsten droht 100 Prozent Schuldenquote

In his new annual assessment, the Expert Council for the Assessment of Overall Economic Development warns of an impending sovereign debt crisis for Germany. The task facing Germany is "of historic magnitude and will require tough decisions," according to the analysis presented to Federal Chancellor Friedrich Merz (CDU) on Wednesday.

The background is the high debt incurred for the defense sector, which since spring 2025 is not counted towards the debt brake, accounting for most of it. The Expert Council believes this cannot continue because the debt ratio would otherwise rise to up to 100 percent. However, shifting defense spending back into the normal budget would cause expenditures to exceed revenues.

At the same time, social spending and interest costs are also growing. The financing gap would amount to around 300 billion euros in 2040. "It is clear that something must happen now. We have no other choice," said the council chairwoman Monika Schnitzer to the Handelsblatt. To close the gap, the economic ways propose reducing state spending, including a reform of commuter allowances and vehicle privileges, as well as a comprehensive pension reform.

However, four of the five council members expect this to be insufficient and advocate for additional revenue increases, such as a higher value-added tax, increases in the income tax, and a new "defense levy". Federal Chancellor Merz expressed his general agreement with the council's assessments. He stated that economic growth alone would not be enough to balance the deficits.

Merz explained, "That is why we will face very far-reaching financial policy decisions in the coming weeks." The federal government is therefore working on making social security more efficient, reducing subsidies, and saving in administration. Regarding the proposals for tax increases, the chancellor did not comment.