In the European Union, Germany has a long history of being a major proponent of balanced budgets. This was perhaps most famously seen a decade ago, during a series of crises involving sovereign debt. According to critics, the requirement for balanced budgets at the period intensified economic downturns.
"After a phase of very expansionary fiscal policy, we are now entering a phase in which we have to ensure more resilience again," said Christian Lindner, Germany's finance minister, following a meeting with his four counterparts in the village of Aschau im Chiemgau in the state of Bavaria, in the country's southeast.
According to Lindner, the European Central Bank's (ECB) efforts to combat inflation would also be undermined by an expansionary fiscal policy. According to him, this would extend the tightening drive to control inflation.
The five ministers issued a united statement calling for a "return to fiscal normality" following a period of expanding fiscal policies to address the pandemic's and the energy crises' consequences.
The goal, according to Austria's Finance Minister Magnus Brunner, is to create room for maneuver in case of future crises.
Germany's Lindner asserted that the state's habitual use of borrowed funds to jump to its citizens' rescue had to end.
"If not, Germany will need to increase taxes to pay the interest on its past debts. That would choke off the economy, according to Lindner.