Will Germany reapply the debt brake?

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By Lewis McLellan
28 Jan 2021

German politicians are planting their flags, preparing for the leadership tussle that is set to follow chancellor Angela Merkel's departure from the post later this year. Low rates have increased debt's popularity as the means to fund economic stimulus but Germany’s frugality is legendary and now a fight is brewing over relaxing its famous debt brake, writes Lewis McLellan.

The coronavirus pandemic has, of course, meant a temporary relaxation of the Schuldenbremse, which keeps Germany’s structural deficit to below 0.35% of GDP.

Germany's deficit shot up to 8.8% of GDP last year. But when the decision was made to allow that, German state secretary for financial market ...

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