I know from recent conversations, including with some in the Ministry of Finance, that the feel boxed in by their own communication strategy around ‘black zero.” Many readily admit the need for fiscal easing, but they worry about “failing” to deliver on fiscal target.
They use some off-balance sheet maneuvers to provide some fiscal support, but they know that much more is needed. The problem is that they created a monster—literally erecting monuments to honor the zeroing out of deficits. So, the public believes budget outcomes are paramount.
Many government officials feel trapped by their own campaign to entrench fiscal targets/fear of deficits in the minds of the German people. A tragic (but important) lesson here.
