Finance
Experts commission starts working on Germany's debt brake reform
Published by Global Banking & Finance Review®
Posted on September 11, 2025
1 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on September 11, 2025
1 min readLast updated: January 21, 2026
Germany's expert commission starts reforming the debt brake to modernize public borrowing limits, aiming for fiscal flexibility and compliance with EU rules.
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)
The expert commission is tasked with modernizing the debt brake, which restricts public borrowing to 0.35% of gross domestic product.
The reform aims to ensure lasting fiscal leeway for investment while limiting the debt burden, and it must be compatible with European fiscal rules.
Initially, the reform was expected to be completed by the end of 2025, but this timetable is now considered too ambitious.
In March, Germany's parliament approved plans for a massive spending surge, including a 500-billion euro special fund for infrastructure, which is excluded from the debt brake.
The German Finance Minister Lars Klingbeil emphasized the need for a smart modernization of the debt brake in a recent statement.
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