According to the leader of the Christian Democrats of Germany, Friedrich Merz, the legislation limiting Germany’s borrowing can be reformed if the purpose is to increase investments.
The leader of the Christian Democrats (CDU) vying for the position of Chancellor of Germany in the upcoming elections Friedrich Merz said that the country could consider reforming the law that curbs borrowing, but only if the loan is taken for investments.
Merz commented on Germany’s so-called debt brake, which limits the public finance deficit to a maximum of 0.35 percent of the country’s gross domestic product.
Debt brake was one of the reasons for the federal chancellor By Olaf Scholz to the crisis of the government. The debt brake prevented Scholz from allocating unused corona-era loans to investments.
According to Merz, the legislation limiting debt could be reformed.
– Of course (the law) can be reformed. The question is, what would be the reason for the reform?
According to Merz, taking on debt could be considered if the loans were used to increase investments and development expenses. However, the debt brake would not be changed if the loan was intended to finance social benefits or increase consumption, Merz said.
Source: Reuters