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As the question of the German fiscal policy stance has been discussed here lately, a few observations here from my side. (Thread) @schieritz @Brad_Setser @adam_tooze @pm_steinberg @RobinBrooksIIF @chris_Breu @ojblanchard1 1/
According to the #IMF estimates of the cyclically adjusted primary government balance, fiscal policy this year is remarkably expansionary. Remember, it is the change in this balance which gives an indication of the impact on the economy. 2/ 
If you take the IMF data, you get a fiscal impulse of about 0.6 percent of GDP. Our narrative approach in the @IMKFlash forecast come to a fiscal impulse of about 0.7 percent of GDP. 3/
While, of course, there is fiscal space in Germany, the data also shows that there has been a significant change in the German fiscal stance between the time before 2008 and after 2012: 4/
While before 2008, there has been a permanent tightening, the stance has been broadly neutral since 2013, and expansionary in 2017 and 2019. The 2018 tightening was an accident due to long coalition negotiations which left the country without a budget. 5/
Oh, and concerning the 2011 tightening: As far as I remember (and as you can see in the figure above), this tightening was to a significant extent just the relapsing of the stimulus package of 2010. 6/
This was mainly no discretionary tightening, but just that one-off programmes came to an end. (A certain element might have been the preparation for the constitutional debt brake which came into effect from 2011 onwards.) 7/
Moreover, the structural surplus now is most likely overestimated. Given the development of unemployment (see figure), I find it completely unbelievable that the German economy now has the same output gap as in 2012 or 2003. 8/
Yet, this is what the IMF output gap estimate would imply. Yet, if we have a larger (positive) output gap now or had a smaller one in 2012 than reported by the IMF, then fiscal policy would have been more expansionary. 9/
One last picture: Government spending (excluding interest rates) in Germany has grown quite substantially over the past 6 years: Annual increases were between 3.5 and 4 percent, clearly above nominal trend growth. 10/
Also, this has been a stark change over the pre-2008 period, when public spending increased by a meager 1 percent. Note that this growth in the past years has occurred without structural changes on the revenue side. 11/
In summary: After permanent tightening before 2008, fiscal policy has been much more relaxed since 2013, yet you need to look a bit deeper to see the change. /END
