The Bundesbank Act says that the German central bank, in exercising its powers, is von Weisungen der Bundesregierung unabhängig, independent of instructions from the federal government. In 1956 Chancellor Konrad Adenauer attacked an interest rate increase by the Bundesbank’s predecessor in a speech to industrialists in Cologne. Das Fallbeil trifft die kleinen Leute. The guillotine falls on the little people. Later, according to a Bundesbank president of the time, Chancellor Helmut Schmidt said at almost every meeting with the bank: Sie werden doch nicht schon wieder die Zinsen erhöhen! Surely you are not going to raise interest rates again!
economics
A Score Built From Paying on Time
The Schufa was founded in Berlin in 1927. It grew into a system for judging how people pay. Today it holds data on 67.9 million people. For 17 March 2026 it announced a new score on a scale from 100 to 999 points, based on twelve criteria. Payment problems are among them, and so is the age of a person’s oldest credit card. The consumer advice center of North Rhine-Westphalia welcomed the greater transparency but criticized parts of the new score. Younger consumers “haben gar nicht die Chance auf einen guten Wert,” said its legal expert Christine Steffen. They have no chance at all of a good score. They have not yet been able to prove themselves in economic life.
The Five Economic Wise Ones
Germans call them die Wirtschaftsweisen, the economic wise ones. Their official name is the German Council of Economic Experts. A federal law of 14 August 1963 created it. The law sets one main condition for its five members. They must have special knowledge of economics and experience of the economy. They may not represent a business association or an organization of employers or employees. Every year the council must deliver its annual report to the federal government by 15 November. A minority may publish a dissenting view. On 12 November 2025, the council handed its report to Chancellor Friedrich Merz.
Reopening a Promise
Before the federal election of February 2025, the CDU and CSU promised in their program: Wir halten an der Schuldenbremse des Grundgesetzes fest. We are holding to the debt brake of the Basic Law. A month after the election, the party leader Friedrich Merz, not yet chancellor, led a reform of the debt brake through the outgoing Bundestag. It passed on 18 March 2025. In the ZDF Politbarometer poll that week, 73 percent of respondents said that the Union and Merz had deceived the voters. Among the Union’s own supporters, 44 percent said so.
Your Savings Are Safe
On Sunday, 5 October 2008, in the middle of the financial crisis, Chancellor Angela Merkel and Finance Minister Peer Steinbrück stood before the cameras. Merkel said: Wir sagen den Sparerinnen und Sparern, dass ihre Einlagen sicher sind! We tell the savers that their deposits are safe. No decision of parliament stood behind the guarantee. An economics journal later noted that it was put into the world without a decision of parliament, as a political promise. It calmed the savers, as intended.
Plan the Forms, Not the Process
From 1932, economists of the Freiburg School around Walter Eucken developed ordoliberalism. In this view, the state creates an Ordnungsrahmen, a framework of order, that guarantees competition and the freedom of citizens in the market. Eucken’s formula is often quoted: Staatliche Planung der Formen – ja; staatliche Planung und Lenkung des Wirtschaftsprozesses – nein. (State planning of the forms, yes. State planning and steering of the economic process, no.) Ludwig Erhard’s economic policy after the war drew on these ideas. Ordnungspolitik, policy that shapes the economic order through stable framework conditions, is still one of the three classic areas of German economic policy.
The Debt Brake
In 2009, Germany wrote a limit on new public debt into its constitution, the Schuldenbremse, the debt brake. The Bundestag passed it on 29 May 2009, and the Bundesrat followed on 12 June. From 2016, the federal government could borrow no more than 0.35 percent of economic output in structural terms, and from 2020 the states could not borrow at all in structural terms. A change now needed two-thirds of the members of the Bundestag and two-thirds of the votes in the Bundesrat. On 18 March 2025, the outgoing Bundestag changed it with 512 votes to 206. Defense spending above one percent of economic output was exempted, and a special fund of 500 billion euros was created for infrastructure and climate neutrality. The Bundesrat approved on 21 March 2025 with 53 votes, where 46 were needed.
The Euro Starter Kit
The euro replaced the D-Mark on paper on 1 January 1999. Germans kept paying with D-Mark notes and coins for three more years. From 17 December 2001, banks sold euro starter kits: a bag of euro coins worth 10.23 euros for 20 D-Marks. Germany provided 53.5 million of them. ZDF summed up the aim: Vertrautheit schaffen, Wechselgeld sichern und die Umstellung an den Kassen beschleunigen, to create familiarity, make sure there was change, and speed up the switch at the checkouts. The D-Mark remained legal tender until 31 December 2001, and large parts of retail and the banks voluntarily accepted it until 28 February 2002.
Forty-Nine Days in Rothwesten
The currency reform of 1948 changed West Germany’s money overnight. From 21 June 1948, only the new Deutsche Mark was valid. The details had been worked out in secret. From 21 April to 8 June 1948, eleven German financial experts met in a closed building in Rothwesten near Kassel, behind a fence guarded by US military police. For 49 days, they drafted the regulations and the logistics of the reform. On the Allied side, most of the work was done by Edward Tenenbaum, who was 27 years old.
Dissent on the Record
Since 21 December 1970, a judge of the Federal Constitutional Court may publish the dissenting opinion he or she held in the deliberations. This Sondervotum, separate opinion, is printed with the decision. When it was introduced, it was very controversial, because many feared the court would lose authority. In practice it stays rare. Of 1,714 decisions in volumes 30 to 101 of the court’s official reports, 108 carried a separate opinion. The council of economic experts that advises the federal government, the Wirtschaftsweisen, has the same rule by law. A minority with a different view may state it in the report. Peter Bofinger, a member from 2004 to 2019, often disagreed with his colleagues and wrote minority opinions in several reports. In 2017, he wrote: Im Rat der fünf Wirtschaftsweisen gibt es zu viel Konformismus und zu wenig Minderheitsvoten. (In the council of the five economic sages there is too much conformity and too few minority opinions.)