Germany has entered a hot pre-election period for good, as was seen yesterday in the debate on the government crisis in the Plenary of the German parliament, but also in the public positions of the party leaders. And all this while the German economy is going through a difficult period.

Already yesterday Wednesday, while the debate was ongoing in the Bundestag, wise men of the German economy published forecasts for 2025 which are worse than the initial ones, predicting growth at 0.4% and underlining the structural problems of the German economy as well as the shocks received from the international geopolitical situation in recent years (pandemic, war in Ukraine, energy crisis, war in the Middle East, pressures of China, re-election of Trump).

Revision of the “debt brake” soon?

What makes him feel, however, are the statements of the head of the Christian Democrats, Friedrich Merz, about revising the constitutional rule on the debt brake in favor of investments in critical investments for which additional state borrowing is needed beyond the 0.35% of GDP as the constitutional rule currently provides.

Mertz said yesterday, Wednesday, at the financial conference of the newspaper Süddeutsche Zeitung and indirectly in his speech to the German parliament, that he is open to a dialogue on reforming the debt brake for investments, e.g. in the critical infrastructure sector but not for additional social costs.

The first reaction did not take long to come from the presidency of the Social Democrats, i.e. the possible post-election partners of the Christian Union in the context of a “grand coalition”, if one takes into account at least the opinion polls so far.

Social Democrat co-chair Saskia Esken, speaking to Politico, called Mertz’s thoughts in the right direction, stating that the debate on a debt reform could start immediately even in the current parliamentary term.