Piwarz: Borrowing Should Be Limited to a Specific Time Frame

Saxony intends to make use of the option to take on new debt only for a limited time. Finance Minister Christian Piwarz (CDU) made this clear when presenting the government’s draft for the 2027–2028 biennial budget. “For us, borrowing must not be a convenient tool for simply postponing structural problems into the future. It can be a necessary component in an exceptional situation,” he emphasized. If future generations benefit from it, he said, it is justified.

According to Piwarz, a robust welfare state can only be sustained in the long term if the economic foundation is strong enough to support it. “In the long run, a state cannot promise more than it can finance. And politics cannot maintain trust in the long run if an ever-widening gap emerges between political promises and financial capabilities.” Only real economic growth leads to higher tax revenues in the long run.

By amending the Basic Law, the Bundestag had paved the way for limited new borrowing by the federal states totaling up to 0.35 percent of gross domestic product per year. Saxony therefore plans to take on a total of just under 1.5 billion euros in debt over the next two years.