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GERMANY: Bitter Debt Brake Debate Not Necessarily An End To Fiscal Package

GERMANY
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With debate underway in the old Bundestag on proposals from the incoming gov't parties on reforming the constitutional debt brake to fund defence and infrastructure spending, comments from lawmakers are hitting wires and have the potential to move markets. 

  • It should be noted that this Bundestag session is extremely controversial given that is is formed by the 'old' Bundestag rather than those that won seats in the February election.
  • Given the high tensions surrounding the reforms and the bitter nature of the party politics involved, it is likely that apparently hardline comments are going to be reported across the course of the debate.
  • While the eventual outcome of talks involving the centre-right CDU/CSU, centre-left SPD and environmentalist Greens on supporting the reforms is unclear, apparently rancorous comments from lawmakers in the Bundestag plenary should perhaps not be viewed as a nail in the coffin of the fiscal package. 
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With debate underway in the old Bundestag on proposals from the incoming gov't parties on reforming the constitutional debt brake to fund defence and infrastructure spending, comments from lawmakers are hitting wires and have the potential to move markets. 

  • It should be noted that this Bundestag session is extremely controversial given that is is formed by the 'old' Bundestag rather than those that won seats in the February election.
  • Given the high tensions surrounding the reforms and the bitter nature of the party politics involved, it is likely that apparently hardline comments are going to be reported across the course of the debate.
  • While the eventual outcome of talks involving the centre-right CDU/CSU, centre-left SPD and environmentalist Greens on supporting the reforms is unclear, apparently rancorous comments from lawmakers in the Bundestag plenary should perhaps not be viewed as a nail in the coffin of the fiscal package.