Therefore the proposals of the “Koch-Steinbrück Initiative”, which envisage an across-the-board cut in numerous subsidies, are to be welcomed in this respect. At the same time, the option of completely eliminating out-dated subsidies (such as the home buyers’ grant) should not be excluded.
A marked increase in the proposed linear cuts of 4% over three years also appears warranted, as does extending the cuts to include further subsidies. I have already mentioned that the tax wedge in Germany, which increased noticeably in the 1990s, poses a considerable impediment to growth.