Fiscal Policy in Transition: Legitimacy and Longevity

Eine Hand legt eine Münze auf einen Stapel mit Münzen.

How can government income and spending policy be legitimized through democratic means and safeguarded for the future? This central question is the subject of a new research project spearheaded by Mannheim lawyer Prof. Dr. Michael W. Müller. The Volkswagen Foundation is funding the project for five years with up to 1.3 million euros.

In the years ahead, Germany is expected to invest 500 billion euros into its infrastructure development. However, these plans have also faced backlash: High financial investment does not ensure the anticipated economic recovery. The essential question guiding the research project Demokratisch legitimierte Fiskalpolitik in Zeiten des Wandels (“Democratically legitimized fiscal policy in times of change”) is how a targeted approach to fiscal policy can help achieve economic stability. In addition to the University of Mannheim, the University of Jena, the Kiel Institute for the World Economy (IfW) and the Dezernat Zukunft (DZ) are also involved.

The article by Prof. Dr. Michael Müller, holder of the Chair of Public Law,
European Business Law and Philosophy of Law at the University of Mannheim, focuses on the legal framework provided by the German Basic Law and EU law. In what ways do EU regulations constrain Germany's financial decision-making power? How can trust in major investments, such as those directed towards the Bundeswehr, Deutsche Bahn, and education, be reinforced?

“We have been engaged in discussions about the pressing matters of government loans, tax policies, and budget cuts for quite some time now. We now want to fundamentally analyze these challenges from an economic, historical and legal perspective,” explains Müller.

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