Published by Global Banking and Finance Review
Posted on September 11, 2025
By Maria Martinez
BERLIN (Reuters) -A commission of experts tasked with modernising a cap on public borrowing in Europe's biggest economy met on Thursday for the first time, Germany's finance ministry said.
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 to 0.35% of gross domestic product.
"We need a smart modernization of the debt brake that ensures both: lasting fiscal leeway for investment and limiting the debt burden," German Finance Minister Lars Klingbeil said in a statement.
In addition, the reformed debt rule must be compatible with European fiscal rules, the ministry said.
Initially, it was expected that the reform of the debt brake should be completed by the end of 2025, a timetable which is now considered too ambitious.
Germany's parliament approved in March plans for a massive spending surge, including a 500-billion euro ($568.10 billion) special fund for infrastructure, which is excluded from the debt brake, and largely removing defence investment from the rules that cap borrowing.
(Reporting by Maria Martinez and Christian Kraemer, Editing by Madeline Chambers)
