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Germany's Debt Brake Crisis

Disagreements over Germany's debt brake led to the collapse of the coalition government. Former Finance Minister Lindner's claim that suspending it violated his oath was disputed, highlighting the legal and political complexities.

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English

Germany

International RelationsGermany German PoliticsEconomic PolicyGovernment CrisisConstitutional Law

German GovernmentFdpBundestagLeibniz Center For European Economic ResearchUniversity Of Munich

Christian LindnerOlaf ScholzFriedrich HeinemannStefan Korioth

Why did the German government collapse?: The German government collapsed due to disagreements over the debt brake, a limit on government borrowing. Former Finance Minister Christian Lindner refused to suspend it, citing his oath of office, while Chancellor Scholz wanted to suspend it to address economic challenges.
Who has the authority to suspend the debt brake?: The decision to suspend the debt brake rests with the Bundestag, not the finance minister. Lindner's role would have been to present a draft budget reflecting the suspension decision to the Bundestag for approval.
What does the German Basic Law say about government borrowing?: The Basic Law, Germany's constitution, permits limited borrowing, but the interpretation of when emergency exceptions apply is debated, particularly concerning the ongoing war in Ukraine and its economic impact.
Was Christian Lindner's claim about violating his oath of office accurate?: Lindner's claim that suspending the debt brake would violate his oath of office is misleading. His oath doesn't mention the debt brake specifically; it references the Basic Law, which allows for exceptions under certain conditions.
Is there a consensus on whether the current situation justifies suspending the debt brake?: Experts disagree on whether the current economic situation caused by the war in Ukraine constitutes an "extraordinary emergency situation" justifying a debt brake suspension, with some arguing the war's impact is not sufficiently sudden or uncontrollable.

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