There are rumors that SPD/Grüne of the current Ampel coalition are planning to use the ousting of the FDP party to reform the Schuldenbremse with the help of the CDU/CSU.
This would also be in the best interest of the CDU/CSU, since they will most likely be in the next government.
Resolves YES, if the Schuldenbremse is meaningfully reformed (requiring the help of the CDU/CSU for the necessary majority).
Resolves NO, if there is no reform until the next Bundestag election (including Neuwahlen), or they find a minor workaround to invest more. Resolves NO early, in case of Neuwahlen.
Feel free to ask for clarification.
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3.00https://www.tagesschau.de/inland/innenpolitik/schuldenbremse-debatte-102.html
Could be relevant to the market.
Everybody knows that a reform is due. I think even opposition leader Merz. Nevertheless, he has taken the position to keep it. It could be a face-saving move to allow Scholz make the reform with a minority government, so he doesn't have to make the reform himself? Chances are low though.
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I voted NO just because there were more holders of NO than YES, but then I thought "what if that's what everyone is doing?"
According to Bing Co-Pilot:
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The Schuldenbremse, or “debt brake,” is a fiscal policy mechanism enshrined in the German constitution (Grundgesetz) that aims to limit the amount of new debt that the federal and state governments can incur. Introduced in 2009, it mandates that the budgets of both the federal government and the 16 federal states must generally be balanced without relying on borrowing1.
For the federal government, the Schuldenbremse allows a maximum structural deficit of 0.35% of the gross domestic product (GDP) per year1. The states, however, are required to maintain completely balanced budgets without any new debt from 2020 onwards1. This policy was designed to ensure long-term fiscal sustainability and prevent excessive debt accumulation, which could burden future generations1.
The Schuldenbremse has been a topic of significant debate, especially during economic crises when there are calls for increased public investment and spending2. Some argue that it restricts the government’s ability to respond effectively to economic downturns, while others believe it is essential for maintaining fiscal discipline and avoiding unsustainable debt levels2.
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I'm no expert, but given that I've heard being debt free is a major contributing factor to German economic growth in recent decades and a big part of German culture, it seems unlikely to be abolished or significantly loosened
@BrunoParga yes, the new voting law was passed and is active. Though, the constitutional court decided that the new 5% rule was unconstitutional. They decided that the old 5% rule shall prevail until a change that is allowed with the constitution happens.
@Gideon37 what's the difference between the new and the old 5% rule? Counting it statewide versus nationwide?
@BrunoParga the old one had an exception that parties with less than 5% of the vote are only excluded from parliament if they fail to win three seats from first mandates. The new rule didn’t have this exception.