economics Archives - Page 15 of 24

The Tax Estimate Before the Budget

Twice a year, a working group meets to estimate Germany’s tax revenue. The group has existed since 1955. Its members include five economic research institutes, the Bundesbank, the Council of Economic Experts and the Federal Statistical Office.

Eight of the members each make their own estimate for every single tax, independently of the others. The group then discusses the estimates until it reaches a consensus that all members can support. The spring estimate is the basis for the federal budget draft for the following year.

The Black Zero

Die schwarze Null, the black zero. In November 2014 the Bundestag passed the federal budget for 2015 without any new borrowing. It was the first time since 1969. Total spending was set at 299.1 billion euros.

Critics doubted that the budget was really balanced. The Green budget politician Sven-Christian Kindler said: “Schäuble versteckt seine Schulden trickreich in Schattenhaushalten.” Schäuble hides his debts cleverly in shadow budgets.

The Fixed-Deposit Account

Das Festgeldkonto, the fixed-deposit account. Uli Hoeneß has described how FC Bayern Munich once had twelve million marks in sales and seven million marks in debt. One transfer in 1984 put the club back on its feet.

The remaining million, Hoeneß said, went into the fixed-deposit account, “und seither hatte der FC Bayern keine Schulden mehr”, and since then FC Bayern has had no debts. This famous account later grew to a sum in the hundreds of millions. In 2014 the club paid off its stadium after 9.5 years instead of the planned 25.

World Savings Day

At the end of October, German children carry their filled piggy banks to the bank. The occasion is the Weltspartag, World Savings Day. Banks and savings banks often hand out small gifts, such as money boxes, cuddly toys, games and books.

The day was created in 1924 by delegates from 27 countries. The German savings banks first celebrated it on 31 October 1925. Since then it has promoted the idea of saving.

Unpaid Overtime

According to the Institute for Employment Research, IAB, employees in Germany worked about 1.2 billion overtime hours in 2024. More than half of them, 53.6 percent, were unpaid. The same figure appears in a parliamentary question in the Bundestag in 2025. The IAB count leaves out overtime that is later balanced through working-time accounts. Unpaid here means that the hours were neither paid nor taken back as time off.

The Magic Square

The Stability and Growth Act of 8 June 1967 requires German economic policy to pursue four goals at the same time: stable prices, a high level of employment, external economic balance, and steady and adequate growth.

German students of economics learn the four goals as the magisches Viereck, the magic square. It is called magic because the goals are hard to reach together. School materials also teach a magic hexagon with two further goals.

The Time Account

Many German employers keep an Arbeitszeitkonto, a working-time account. Extra hours are credited to it as plus hours, and they are later taken back as time off. According to the Institute for Employment Research, IAB, about 37 percent of all employees had such a short-term account in 2023. The share of workplaces with these accounts had doubled to 29 percent. At the end of 2023, the average account holder had 30.4 plus hours. In total, about 473 million hours were held on these accounts. Some employers also offer long-term accounts. In these, pay is saved as a Wertguthaben, a value credit, for a later period of paid leave, such as care leave or early retirement.

A Score That Needs Time

The credit agency Schufa holds data on 67.9 million people in Germany. Its new score, due to start on 17 March 2026, uses twelve criteria on a scale from 100 to 999. One of them is the age of a person’s oldest credit card. Christine Steffen of the consumer advice center of North Rhine-Westphalia commented: Gerade jüngere Verbraucher:innen haben gar nicht die Chance auf einen guten Wert, weil sie sich noch nicht im Wirtschaftsleben beweisen konnten … Younger consumers in particular have no chance of a good score, because they have not yet been able to prove themselves in economic life.

The House Bank

A German company’s Hausbank, its house bank, is the bank through which it handles more business than through any other. The start-up portal of the federal economics ministry and the KfW describes the relationship: Mit ihm besteht eine dauerhafte und vertrauensvolle Beziehung. It is a lasting relationship of trust. The house bank also has a formal role. Companies and founders usually apply for public development loans through it. This is called the Hausbankprinzip, the house bank principle. The house bank usually keeps the customer relationship and the risk.

Diagnosis Without Prescription

Germany’s Council of Economic Experts, the Sachverständigenrat, was created by a law of 14 August 1963. Its task is to present the overall economic situation and its foreseeable development. The bill first foresaw a general ban on recommendations. Parliament softened it before the law passed, so the council may not recommend specific economic or social policy measures. Its job is diagnosis, and the choice of measures is left to politics. In 1978 the trade union journal Gewerkschaftliche Monatshefte accused the council of violating its legal mandate, and critics still say it regularly ignores the ban.