this has reduced the public-sector share of GDP the lowest since 1991; on the other, such action restricts
the scope for further expenditure reductions. For these reasons it does not seem possible to implement
further short-term restructuring measures at present. Any remaining scope for cutting expenditure
(including tax expenditure) must be used to reduce the government debt. In addition the focus must be on
long term structural reform programms that achieve a steady and sustainable decline in expenditures
commitments.
On the institutional side there is a well developed system of rules and budgetary institutions place which
substantially limits expenditure growth and public deficits and are in principal able to focus the process
of budgetary decision-making on quality aspects of public finances. On that ground, a close exchange
with other EU Member States on best practises of institutions which could be adapted to the German
system seems fruitful. The exchange can promote more effective budgetary rules which focus on the
quality aspect of public finances an help sharpening the relevant institutions like the Financial Planning
Council in order to reach maximum efficiency and effectiveness in the budgetary process.