The German Finance Minister, Lars Klingbeil, has granted the expert commission tasked with reforming Germany’s debt brake significantly more time than initially planned. Instead of presenting its proposals in November, the commission is now expected to submit them in the spring of next year, according to reports. The delay is attributed to the late appointment of the commission, which only commenced work in mid-September.
The 15-member commission, comprised of experts nominated by all political parties except the AfD, is undertaking a comprehensive review of the existing rules. The potential new debt regulation, enshrined in the Basic Law, might not be implemented until early 2027 at the earliest.
The current government coalition has already loosened the previous debt brake restrictions, allowing exceptions for defense spending exceeding one percent of Gross Domestic Product. They also established a special budget of approximately 500 billion euros for infrastructure investments.
Data released by the Finance Ministry reveals a widening gap between planned borrowing and the maximum allowed net credit uptake under the current debt brake. For 2026, projections indicate a planned new debt of 89.9 billion euros, compared to a permissible maximum of 35.6 billion euros.
This discrepancy is expected to increase in the coming years. The permissible borrowing limit is projected to decrease significantly, from 24 billion euros in 2027, to 9.4 billion euros in 2028 and 4.8 billion euros in 2029. In contrast, the anticipated new debt is forecast to rise to 126.9 billion euros by 2029.
This represents only a portion of the total federal borrowing. The government also incurs additional debt through its special budgets for infrastructure, military upgrades and climate and transformation funds. In 2026 and 2027, these contribute roughly 84 billion euros each, decreasing slightly to approximately 60 billion euros for the following two years.
By 2029, the anticipated new borrowing of 186.1 billion euros stands in stark contrast to the debt brake limit of just 4.8 billion euros, exceeding the permissible amount by a factor of almost forty. The commission’s work aims to address these significant imbalances and formulate a revised framework for Germany’s fiscal policy.