Germany to take on 45.6B euros in new debt in 2023

BERLIN – Germany will comply with its constitutional debt brake next year for the first time since 2019, even as it takes on significantly more new debt than laid out in its summer draft, several Bundestag budget committee sources told Reuters on Friday.

The budget foresees 45.61 billion euros ($46.62 billion) in new debt next year, more than double the 17.2 billion euros planned in the government’s summer draft.

Total budget spending is planned at around 476.3 billion euros. The Bundestag is set to approve the budget on Nov. 25.

Germany suspended its constitutionally enshrined deficit limit of 0.35 percent of gross domestic product during the COVID-19 pandemic.

Compliance with the debt brake is only possible because the ruling coalition is funding spending as a result of the Ukraine war with special funds meant to stabilize the economy and cushion high energy prices.

The Bundestag has already approved new debt of up to 300 billion euros for a special fund for the German army and for a stabilization fund to finance, among other things, the planned gas and electricity price brake, neither of which are part of the regular budget.

($1 = 0.9783 euros)