FRANKFURT, Germany (AP) — The two political parties expected to form the next German government have agreed to loosen the country’s constitution restrictions on borrowing, enabling 1 trillion euros ($1.08 trillion) or more in spending on defense and infrastructure. It’s a major change in Germany’s debt-averse political culture. Intensifying debate over the debt brake throws […]
Germany is set to ease its constitutional debt limits, allowing for increased government spending, potentially over 1 trillion euros, on defense and infrastructure. This marks a significant shift from Germany's historically debt-averse political culture, driven by the pandemic, geopolitical events, and a recent court ruling that challenged the government's previous use of emergency clauses to bypass the debt brake. The prior debt brake, established in 2009, restricted new borrowing to 0.35% of GDP, but recent events have led to political divisions and a reevaluation of the policy.
