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The KURIER spoke to IHS chief and economic researcher Martin Kocher about “real” debts, necessary reforms, and fear of hyperinflation.
KURIER: German Finance Minister Scholz says you could imagine going into a lot more debt. It is essential to spend the money on future investments, on new growth. Right?
Martin Kocher: Due to the low interest rates we pay on the national debt, we have much more leeway than 20 years ago. And it is true that if this debt is contracted to make long-term investments in the future, in infrastructure, in digitization, in the fight against climate change, then you may not have a problem with higher debts.
Austria’s debt level will rise to € 350 billion in 2021. Isn’t that a threatening development?
This is not a threat to Austria in the short term because we are a good debtor. We can borrow at low interest rates. Austrian debt securities are also popular with the people. The problem is the long-term component. The debts that we are incurring now to fight the crisis: this money cannot be spent again on investments in the future. Finding the balance between the need to save the economy and, at the same time, strengthen the future viability of the country, that is the difficult task that politicians now face.
