The center-left Social Democratic Party (SPD) and the center-right Christian Democratic Union  and Christian Social Union  (CDU/CSU) — currently trying to form the new German government  — want to take out unprecedented amounts of new debt.

To do this, they have to change Basic Law, Germany’s constitution, which can only be achieved with the approval of two-thirds of the members of the Bundestag, Germany’s lower house of parliament.

Together with the Greens, the SPD and CDU/CSU could pass the constitutional changes in the outgoing Bundestag.

Whether this will happen remains to be seen. The Greens are still part of the caretaker government but are already preparing for their future role in the opposition after their defeat in the February elections.

The Greens have said they are not inclined to help their political opponents without anything in return. Especially as the CDU/CSU and their candidate for chancellor, Friedrich Merz, had categorically ruled out a reform of the debt brake, while the Greens, SPD and the Left Party have long been demanding just that.

Read more here: Germany’s likely new government makes a risky gambit

The Green Party will not support CDU leader Friedrich Merz’s proposals for sweeping debt reforms and current talks do not give cause for optimism about a compromise, senior Greens official Katharina Dröge told reporters.

In the talks with the CDU/CSU and the SPD, there is no rapprochement that would allow a timely agreement to be promised, Dröge said.

She once again criticized the fact that no money had been earmarked for climate protection in the extra pot for infrastructure.

“Climate protection is the great challenge of our time,” Drö said. “Here, too, we have not yet seen sufficient willingness to act together.”

As Germany’s lower house of parliament prepares to debate debt reform, questions are being raised about whether the outgoing Bundestag has the authority to make such decisions.

The Left Party and the far-right Alternative for Germany (AfD) have filed lawsuits with the Constitutional Court to block the special sessions this week and next. They argue that such moves are a violation of the rights of the new members of parliament.

Following elections on February 23, which saw the conservatives come out on top, the old Bundestag continues its work until the new parliament convenes for the first time on March 25.

The debt reform requires a two-thirds majority to change Germany’s constitution. But electoral gains by the AfD and The Left last month mean it could be much harder to win support once newly elected lawmakers take their seats.

Instead, the CDU/CSU, led by Friedrich Merz, and the SPD are hoping to push the plan through the outgoing parliament with the help of the Greens. Until the new Bundestag convenes, the old parliament is considered to have a quorum and the authority to make decisions.

There has been no progress in talks to massively increase Germany’s government borrowing by reforming the country’s debt limits, a Green Party official told RTL/ntv after further negotiations with the conervative CDU/CSU alliance.

Britta Hasselmann warned of “serious gaps and mistakes in the conception” of the plans of CDU leader Friedrich Merz and his likely coalition partners, the Social Democrats (SPD).

Changing the debt rules requires a constitutional amendment, which requires a two-thirds majority in the Bundestag, Germany’s lower house of parliament.

For that, the conservatives and Social Democrats need the support of the Greens, who have so far refused to back the whole package.

The center-left SPD and conservative CDU/CSU alliance — currently trying to form the new German government — want to take out unprecedented amounts of new debt.

To do this, they have to change Basic Law, Germany’s constitution, which can only be achieved with the approval of two-thirds of the members of the Bundestag, Germany’s lower house of parliament.

Together with the Greens, the SPD and CDU/CSU could pass the constitutional changes in the outgoing Bundestag.

Whether this will happen remains to be seen. The Greens are still part of the caretaker government but are already preparing for their future role in the opposition after their defeat in the February elections.

The Greens have said they are not inclined to help their political opponents without anything in return. Especially as the CDU/CSU and their candidate for chancellor, Friedrich Merz, had categorically ruled out a reform of the debt brake, while the Greens, SPD and the Left Party have long been demanding just that.

Read more here: Germany’s likely new government makes a risky gambit.

As Germany’s lower house of parliament prepares to debate debt reform, questions are being raised about whether the outgoing Bundestag has the authority to make such decisions.

The Left Party and the far-right Alternative for Germany

Longtime coalition partners the Social Democrats (SPD), are pushing to reform the country’s borrowing rules, which took hold as part of efforts to balance government budgets after the 2008 global financial crisis.

When the new Bundestag is seated on March 25, those newly elected members who are against the reform are expected to be in the minority, potentially making it easier for the ruling parties to pass it.

At stake is the future of a 2008-imposed financial safeguard known as the “debt brake” (Schuldenbremse) – a cornerstone of Germany’s post-crisis fiscal policy aimed at keeping a lid on borrowing to avoid piling up unsustainable debt.

For that, the conservatives and Social Democrats need the support of the Greens, who have so far refrained from backing the entire package.

In Germany, the federal government and the 16 states are obliged to balance their books and are practically prohibited from taking out extra loans. No other G7 country has such strict limits on new borrowing.

The rules were introduced during the 2009 global financial crisis. The debt brake became legally binding for the federal government in 2016 and for the states in 2020.

However, the debt brake is not absolute, at least not for the federal government. While an outright ban on debt applies to the federal states, the federal government is permitted net borrowing amounting to a maximum of 0.35% of economic output.

The Basic Law also allows the debt brake to be suspended “for natural disasters or unusual emergencies beyond governmental control and substantially harmful to the state’s financial capacity.”

Read more here: What is Germany’s debt brake?