Overview

• On August 8, the finance ministry’s scientific advisory board published a statement urging against easing Germany’s constitutional debt brake.
• The board argued that effective borrowing limits are more critical after the Bundestag approved a temporary €500 billion investment fund.
• Members warned that relaxing the debt brake could breach EU fiscal rules and risk the stability of the euro.
• A cross-party reform commission, including economists Clemens Fuest, Volker Wieland and Thiess Büttner, is tasked with delivering permanent debt-brake recommendations by year’s end.
• SPD leaders view the debt brake as an investment hurdle and seek looser limits, while the Union insists on preserving stringent constitutional caps.