Germany – Hurdles to clear before the debt spigot can be turned open

On Tuesday, the CDU/CSU and the SPD, who are expected to form the new governing coalition, agreed to largely suspend the debt brake for defense spending and to set up a special fund of 500 billion euros for investments in infrastructure, the borrowing of which will also not count towards the debt brake (for details see here ). However, there are still a few hurdles to overcome before these plans can be implemented.

When will the Bundestag and Bundesrat decide?

In order to amend the Basic Law (the German Constitution) as planned by the CDU/CSU and SPD, both the Bundestag and the Bundesrat must agree with a 2/3 majority. As this majority is unlikely to be achieved in the newly elected Bundestag, the old Bundestag, which will remain in office until its successor is constituted (probably on March 25), is to decide.

To this end, the Bundestag is to convene for two special sessions on March 13 and 18, with the final vote taking place on March 18. Between the sessions, the Bundestag Budget Committee will meet for one or two special sessions. If the proposals receive the necessary majority in the Bundestag, the Bundesrat will vote on them on March 21.

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