Germany to limit public debt in constitutional amendment | Germany| News and in-depth reporting from Berlin and beyond | DW | 12.06.2009
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Germany

Germany to limit public debt in constitutional amendment

A limit on government deficits is on its way into the German constitution after it was passed by the country's legislative upper house.

The German Bundesrat

Germany's Bundesrat has approved a constitutional amendment limiting government debt

The Bundesrat, which is made up representatives of Germany's 16 states, voted 13-3 to approve the constitutional amendment limiting government debt. The amendment was adopted by the Bundestag lower house last month, and now only needs to be signed by the president and published in the government gazette to come into force.

The amendment primarily affects the states' budgets, only allowing them to take on new debt as they pay off old debt beginning in 2020.

Rules for the federal government are to take effect in 2016 and allow an increase in borrowing of just 0.35 percent of the country's gross domestic product (GDP).

The amendment comes with various built-in exceptions and the federal government can sidestep most of the limitations by declaring an emergency.

While borrowing will be allowed during recessions, governments will have to reduce their debt when good economic times return.

Critics on the left of the political spectrum say the amendment will limit the ability of the government to help the poor, while those on the right say the exceptions water down the measure so much that it will not stop the growth of public debt.

hf/dpa/Reuters
Editor: Chuck Penfold

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