At the end of a two day informal meeting in Aschau im Chiemgau (Bavaria,German Alps), Finance Ministers of German speaking countries have issued a joint declaration. First such meeting took place in 2010 and it is now a well established tradition bringing together the ministers from Austria, Germany, Liechtenstein, Luxembourg and Switzerland.
They made an unequivocal plea for a supply side economics policy in order to grow productivity, to spur the digitalisation, to tackle the necessity to decarbonise, the demographic changes, the security challenges and the globalization all happening.They insist expansive fiscal measures need to be avoided as we are back in normal times in respect to fiscal policies. The message is clear: for them there is a need to return to strict budget policies in order to restore the necessary financial buffers and to maintain a sufficient degree of freedom of action when crises return. The need to avoid obstructions in following a monetary policy to reduce inflation is also explicitly mentioned. Back to the old logic from before Covid, even if they don’t want to ignore the necessity to mobilize massive funds to sustain and rebuild Ukraine following the illegal aggression of Russia. Funds for which they appeal upon international solutions based on solidarity.
How this firm position will impact upcoming discussions within the EU to reset the fiscal policies in the eurozone and to reform EU’s economic governance rules as proposed by the European Commission this spring remains to be seen. The objective is to conclude the legislative work before the end of the year.
As another aspect of restoring the resilience of the economies, the declaration insists on the importance of further developing the financial literacy of their citizens and expresses the wish to enhance cooperation on this between their countries, without mentioning concrete measures.
The summit was also the occasion for Germany and Austria, and for Germany and Switzerland to sign an update of bilateral tax agreements.
