Germany debt brake reform unlikely during current legislative term
A reform of Germany’s debt brake is unlikely to advance during the current legislative term, according to a report by Bild. The panel set up to propose changes has reportedly failed to reach consensus and may issue only non-binding ideas.
FRANKFURT: A planned reform of Germany's cap on public borrowing will not take place during the government's current legislative term, German mass tabloid Bild reported on Saturday, adding members of the responsible commission have failed to find common ground.
The paper, citing commission sources, said members were now meeting only as a formality, adding a final meeting was planned for May and that the body would subsequently present a non-binding proposal of ideas, rather than a full reform.
A German government spokesperson declined to comment on the report.
The government included in its coalition agreement the establishment of an expert commission to develop a proposal for modernising the debt brake, which restricts public borrowing in Europe's biggest economy to 0.35% of gross domestic product.
The reform would mark a rollback of the borrowing rules imposed after the 2008 global financial crisis that many now say are outdated and keep Germany in a straitjacket. The government is pursuing a massive spending splurge to revive the economy and boost defence spending.
The commission, which only started work in September, was initially expected to facilitate a debt brake reform by the end of 2025.
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