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German budget row prises open debt brake debate

  • Court ruling to force Berlin to stick more closely to debt brake
  • Fears rise this could hobble investment in Europe’s top economy
  • Calls grow for reform, even among opposition conservatives
  • But reform unlikely for now as needs two thirds supermajority

BERLIN, Nov 26 (Reuters) – Germany’s budget crisis has given new momentum to reforming self-imposed borrowing limits even among the opposition conservatives, as hunger for sorely needed investment trumps an earlier political obsession with fiscal rectitude.

A constitutional court ruling on Nov. 15 against a budget manoeuvre to get around Germany’s “debt brake” threw the financial plans of Chancellor Olaf Scholz’s coalition into disarray.

It also indicated that his and future governments would have to stick more closely to the spirit of the brake, which limits a government structural budget deficit to 0.35% of gross domestic product, even as…

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