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Jul 24, 2000

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Germany’s Fiscal Reform: Big Boost for Business

During its last meeting on Friday 14th July in Bonn the Bundesrat has approved the biggest financial reform in German history. The reform bill was prepared by finance minister Hans Eichel, while chancellor Gerhard Schröder did his best to guarantee its passage in parliament. Facing growing pressure from public opinion, the opposition Christian Democrats were not able to block the reform in the chamber of regions. Schröder’s SPD-Greens coalition has lately realized a whole line of important political successes and is now expected to arrive in pole position at the next general elections in 2002. Their chances will even grow, if the fiscal reform works like expected and the economy takes advantage of the new favorable business conditions. The Frankfurt stock exchange and several industry leaders have already given an enthusiastic salute to the reform which will lessen fiscal pressure by 60 billion DM a year. The economic and political consequences of this breakthrough will soon be felt all over the continent, where the competition for the best fiscal favor has just begun.

By: Peter Weber

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