GBAF Logo
Global Banking & Finance Awards® 2026 Nominations open, free to enter Nominate now →
Germany's Merz sees high hurdles to further debt brake reform - Finance news and analysis from Global Banking & Finance Review
Finance

Germany's Merz sees high hurdles to further debt brake reform

Published by Global Banking & Finance Review

Posted on July 15, 2026

1 min read

· Last updated: July 15, 2026

Add as preferred source on Google
Finance Banking Markets

German Debt Brake Reform Faces Significant Challenges, Says Merz

Challenges and Prospects for Reforming Germany's Debt Brake

Current Position of Chancellor Friedrich Merz

BERLIN, July 15 (Reuters) - The hurdles for another reform of the German debt brake, which caps public borrowing, are extremely high, Chancellor Friedrich Merz said on Wednesday.

Merz's Outlook on Constitutional Amendment

"In that respect, I am not very confident that we will manage to set another amendment to the debt brake in motion during this government's term," Merz said.

Legal and Political Requirements for Reform

Constitutional Barriers

The debt brake is enshrined in the constitution, and any change would require a two-thirds majority in both the Bundestag and Bundesrat, meaning the coalition would need support from opposition lawmakers.

Expert Commission's Role

A commission of experts appointed by the government is working on different proposals to reform the debt brake.

Reporting and Editorial Credits

(Reporting by Maria Martinez; editing by Matthias Williams)

Key Takeaways

  • The debt brake is enshrined in Germany’s constitution (Articles 109 and 115), allowing only limited structural borrowing (0.35 % of GDP) and can only be amended with two‑thirds majorities in both chambers (amp.dw.com).
  • Chancellor Merz expressed skepticism on July 15, 2026, that the current government will succeed in passing another amendment before the end of its term due to the high political threshold for constitutional change (breakingviews.com).
  • An independent expert commission, established in September 2025, is evaluating ways to modernize the debt brake—such as adding transition phases post‑emergency or making deficit limits more flexible—while preserving fiscal stability (bundesfinanzministerium.de).

References

Frequently Asked Questions

What is the German debt brake?
The German debt brake is a constitutional rule that caps public borrowing in Germany.
Why is reforming the debt brake difficult?
Changing the debt brake requires a constitutional amendment, needing a two-thirds majority in both the Bundestag and Bundesrat.
What did Chancellor Friedrich Merz say about further debt brake reform?
He said the hurdles are extremely high, and he is not confident that another amendment will be achieved during the current government's term.
Is there ongoing work on debt brake reform?
Yes, a commission of experts appointed by the government is working on proposals to reform the debt brake.

Tags

Related Articles

Image for Volvo Cars to receive financial support for its Ghent plant

Volvo Cars to receive financial support for its Ghent plant

Image for Zelenskiy endorses energy boss as new Ukraine prime minister

Zelenskiy endorses energy boss as new Ukraine prime minister

Image for IMF strategy chief urges countries to maintain price stability

IMF strategy chief urges countries to maintain price stability

Image for Argent LNG and Ukraine's Naftogaz sign MoU to explore long-term US LNG supply deal

Argent LNG and Ukraine's Naftogaz sign MoU to explore long-term US LNG supply deal

Image for Russia says foreign troops sent to Ukraine after a peace deal would be legitimate targets

Russia says foreign troops sent to Ukraine after a peace deal would be legitimate targets

Image for French parliament votes on landmark assisted dying bill

French parliament votes on landmark assisted dying bill

More from Finance

Explore more articles in the Finance category

Image for MBDA appoints Airbus' Jean-Brice Dumont as chief executive from November 1
MBDA appoints Airbus' Jean-Brice Dumont as chief executive from November 1
Image for Ukraine says it will protect ports to maintain export volumes after attacks
Ukraine says it will protect ports to maintain export volumes after attacks
Image for Exclusive-Alleged Russian cyber spy in Boston case previously worked for Kaspersky, source says and documents show
Exclusive-Alleged Russian cyber spy in Boston case previously worked for Kaspersky, source says and documents show
Image for Czech lower house backs return of digital sales registry to boost budget income
Czech lower house backs return of digital sales registry to boost budget income
Image for Electra taps Safran for 250 turbogenerators to power hybrid-electric EL9
Electra taps Safran for 250 turbogenerators to power hybrid-electric EL9
Image for German government not stopping UniCredit's takeover of Commerzbank, Merz says
German government not stopping UniCredit's takeover of Commerzbank, Merz says
Image for Russian government prioritises fuel for vehicles servicing food retail chains
Russian government prioritises fuel for vehicles servicing food retail chains
Image for Germany's Merz makes appeal to AfD voters ahead of pivotal state election
Germany's Merz makes appeal to AfD voters ahead of pivotal state election
Image for Italy to shed residual stakes in banks, economy minister says
Italy to shed residual stakes in banks, economy minister says
Image for Ukraine's Black Sea ports lose a third of grain export capacity, farmers' union says
Ukraine's Black Sea ports lose a third of grain export capacity, farmers' union says
Image for Energy developer Rezolv to start building EU's largest solar park in Romania this summer
Energy developer Rezolv to start building EU's largest solar park in Romania this summer
Image for EQT returns with higher $1.75 billion bid in push for Australia's Perpetual
EQT returns with higher $1.75 billion bid in push for Australia's Perpetual
View All Finance Posts