Lars Feld warns that German government’s reform efforts risk failure by setting incorrect policy priorities
Executive summary: Economist Lars Feld published a guest commentary in Handelsblatt warning that, despite relief over the German government finally initiating reforms, it is setting the wrong policy accents and overlooking prerequisites for success. The commentary highlights that flawed reform design could undermine investor confidence, delay needed sectoral adjustments, and increase fiscal risks for Germany.
Who is involved: Lars Feld (economist and former council member), the German Bundesregierung (federal coalition), and related policy stakeholders such as industry groups and labor representatives.
Likely next: The debate is expected to continue in media and parliamentary discussions, potentially influencing upcoming budget negotiations and coalition policy talks over the next months.
Lars Feld’s guest contribution acknowledges the relief that policymakers have finally begun to enact reforms, but he stresses that historical experience shows success depends on meeting specific preconditions. He argues that the current accents chosen by the Bundesregierung neglect those prerequisites, raising the prospect of ineffective or delayed reforms. The piece contributes to an ongoing debate about the credibility and direction of Germany’s reform agenda.
Timeline
- — Lars Feld: Wo die Bundesregierung die falschen Akzente setzt (Handelsblatt)
- — Lars Feld: Stellen wir uns auf höhere Zinsen für länger laufende Bundesanleihen ein (Handelsblatt)
- — Lars Feld: Der Kanzler sollte bei der Einkommensteuer kleinere Broetchen backen (Handelsblatt)
Analysis — what this means
Sectors affected
- German energy sector
- German labor market (Mini‑jobs)
- German fiscal policy / budget
- German healthcare sector
Regulatory implications
- Potential reform of Mini‑job regulations (Abschaffung debate)
- Possible amendment to KfW‑Gesetz allowing Bundesregierung to capture profits
- Adjustments to federal budget law (Schuldenbremse) to accommodate higher borrowing
Historical parallels
- Hartz labor market reforms (2003‑2005)
- Agenda 2010 welfare and labor reforms (2003‑2005)
- Eurozone sovereign debt crisis (2010‑2012) prompting fiscal consolidation
Key entities
Sources
- Lars Feld: Wo die Bundesregierung die falschen Akzente setzt — Handelsblatt
- Lars Feld: Stellen wir uns auf höhere Zinsen für länger laufende Bundesanleihen ein — Handelsblatt
- Lars Feld: Der Kanzler sollte bei der Einkommensteuer kleinere Broetchen backen — Handelsblatt
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