Germany’s Bundestag Approves ‘Debt Brake’ Reform, Paving Way for More Government Borrowing

Germany’s lower house of parliament, the Bundestag, on Tuesday approved amendments to the country’s constitution that will allow future federal and state governments to take on more debt, DW reported. The reform, aimed at revising Germany’s so-called “debt brake”—a set of fiscal rules that limited government borrowing—passed with broad support from key political parties.

A total of 513 MPs voted in favor of the amendments, while 207 voted against, surpassing the required two-thirds majority of 489 votes, the report stated. The reform was backed by the ruling coalition of the Christian Democratic Union, the Social Democratic Party, and the Greens, all of which had reached an agreement on the proposals earlier this week.

The amendments to the constitution are seen as an attempt to provide greater flexibility for the government to address economic challenges, especially in times of crises and future economic shocks.

The legislation will now move to the Bundesrat, Germany’s upper house of parliament, for further review and a vote. A decision in the Bundesrat is expected on Friday, the report added.

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