Wolfgang Schäuble may be seeking ways to circumvent a constitutional amendment that will require balanced budgets in the country by 2016. It would give greater flexibility in times of crises, but is likely to raise eyebrows in countries where Germany has ordered further austerity measures.
It is possible that Finance Minister Wolfgang Schäuble is preparing a plan that would allow his country to circumvent a constitutional amendment requiring balanced federal budgets in order to deal with the worst effects of the financial crisis and bank bailouts.
Germany is currently able to borrow money at almost no cost whatsoever, and in some cases investors are even paying the German government a premium for its securities. Nevertheless, the country is not only calling for austerity in other countries in Europe, but is also implementing its own spending limits.
Starting in 2016, the country's so-called debt brake, or balanced budget amendment, will go into effect. The constitutional amendment will strictly limit annual government borrowing, ensuring that the country remains within the stipulation set out in the euro stability and growth pact that annual budget deficits do not exceed 3 per cent of gross domestic product.
The last government, the grand coalition between Chancellor Angela Merkel's conservative Christian Democratic Union and the centre-left Social Democratic Party, anchored the legislation in the country's constitution. But it appears that the current finance minister is searching for a workaround.
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© Spiegel Online
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