More Confidence in Market Processes - Annual Report of the German Council of Economic Experts 2014/15

The German economic policy increasingly regulates market outcomes in order to achieve distribution targets. Instead, more confidence in market processes would be adequate. In the opinion of the German Council of Economic Experts the efficiency of market processes should be ensured first, and then the distribution outcome can be fitted according to the consensus within the society over the taxation- and transfer-system. In the face of the coming challenges, in particular the demographic change, the reform requirements are considerable. The still good constitution of the German economy provides a chance to improve the framework for private investment and innovation. In order to advance the necessary structural reforms and the consolidation of public finance in the Euro-area, Germany should set a good example. The presentation will be focused on the topics from the annual report addressing concerns of public finance, in particular a reform of the German scheme for distributing government revenues and international taxation.