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Voters and politicians in Germany should not be deceived by high surplus, says ZEW

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Staff Writer | February 22, 2019
According to calculations by the Federal Statistical Office in Wiesbaden, the surplus of the federal government, the states, municipalities and social security funds in 2018 amounted to 58 billion euros.
Friedrich Heinemann
Europe   Professor Friedrich Heinemann
Professor Friedrich Heinemann, head of the “Corporate Taxation and Public Finance” Research Department at the ZEW – Leibniz Centre for European Economic Research in Mannheim, comments on this matter.

“Voters and politicians in Germany should not be deceived by the high surplus.

“The massive surplus recorded in 2018 has been a snapshot in time from which no conclusions can be drawn for the future.

“Politics and demographic change will turn the surplus into a large deficit in the coming years unless countermeasures are taken.

“Health care spending is growing in an uncontrolled manner and pension expenditure is being driven up by the ever greater expansion of benefits and the ageing of the population.

“And in terms of the federal and state governments’ core budgets, parties are competing with one another about the best ideas for rapidly increasing government spending.

“It is an old experience that the biggest mistakes in fiscal policy are made in what seem to be good times.

“We are experiencing that again today.”