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 proposals in November, the commission will now submit its recommendations in the spring of next year, according to reports. This extension is attributed to the commission’s late appointment, with work only commencing in mid-September.
The 15-member panel, comprised of experts nominated by all parties except the AfD, is now tasked with reviewing and proposing revisions to the fundamental law’s debt regulations. Implementation of any new debt rules is unlikely before the beginning of 2027.
The current German government coalition previously eased the existing debt brake provisions. Adjustments include exceptions for defense spending exceeding one percent of gross domestic product and the creation of a special infrastructure investment fund valued at half a trillion euros.
Data released by the Finance Ministry highlights the growing discrepancy between planned borrowing and the maximum permissible net borrowing under the current debt brake. For 2026 alone, the ministry projects core budget borrowing of 89.9 billion euros, compared to a permissible limit of 35.6 billion euros.
This gap is projected to widen considerably in subsequent years. The permissible borrowing limit is set to decrease from 24 billion euros in 2027 to 9.4 billion euros in 2028 and 4.8 billion euros in 2029. Simultaneously, planned new borrowing is expected to rise to 126.9 billion euros by 2029.
Beyond the core budget, Germany’s borrowing activities extend to specialized funds including those dedicated to infrastructure, military modernization and climate and transformation initiatives. These funds are projected to require substantial borrowing of approximately 84 billion euros in 2026 and 2027 and nearly 60 billion euros in the following two years.
By 2029, the projected total new borrowing of 186.1 billion euros contrasts sharply with the debt brake’s permissible limit of just 4.8 billion euros – a difference exceeding fortyfold. The Commission’s deliberations will focus on establishing a framework for future budget oversight and ensuring the country’s ability to meet its debt obligations, alongside assessing the new rules’ compatibility with European Union law.
