Acceso usuarios
Next to taxes, public debt has always been one of the most important funding sources of modern states. Until the beginning of the 19th century, however, it was mainly used in emergency situations, especially (though not only) for the financing of war. Since then, public borrowing has become more and more a regular way of funding state activities and this growing importance can be explained mainly by two developments. First, the number of state-tasks has constantly expanded, and this has automatically led to growing financial demands on the state. Due to the intentions of the politicians (who want to be re-elected, and therefore spend more money to please the public), as well as the requirements of the social welfare state, these demands could not be fully satisfied by taxes only. Both the debt brake and the Fiscal Compact therefore are the result of considerable fear of public borrowing amongst the German public and politicians. Against this background, this article takes a closer look at these two German instruments for curbing public debt (including the incorporation of the Fiscal Compact into German law)
