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GERMANY: Bundesrat Should Not Prove Obstacle To Debt Brake Reform (2/2)

GERMANY

The number of votes in states that have governing coalitions in which at least one party is that are nominally opposed to the debt brake reforms - the far-left nationalist Sahra Wagenknecht Alliance (BSW), far-left progressive Die Linke, pro-business liberal Free Democrats (FDP), and regionalist Free Voters (FW) - comes to a total of 28, over the one-third minority block on constitutional changes. 

  • However, reports claim that FW leader Hubert Aiwanger said over the weekend that "Even if this is complete madness: The CSU can vote in the Bundesrat without us. That's why it's pointless if we continue to oppose it.". An agreement was announced on the evening of 17 March that will see Bavaria vote for the debt brake reform, and alongside all other states that have only the CDU, SPD, and/or Greens in gov't this will ensure the two-thirds majority threshold is cleared. Taggespiegel reports that Minister-President Markus Söder had threatened to bring down Bavaria's coalition and replace the FW with the SPD if the former insisted on opposing the debt brake reform.
  • For the parties supportive of the reforms, the acquiescence of the FW is a major boon that avoids the need for concessions to be made to the parties of the far-left, or the anti-excessive spending FDP.
  • With the Bundesrat set to approve, the only obstacle to the reforms passing remains a larger-than-expected rebellion by CDU/SPD/Green lawmakers in this afternoon's Bundestag vote (expected to start ~0830ET/1230GMT/1330CET). 

Chart 1. Composition of Current Bundesrat, Seats

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The number of votes in states that have governing coalitions in which at least one party is that are nominally opposed to the debt brake reforms - the far-left nationalist Sahra Wagenknecht Alliance (BSW), far-left progressive Die Linke, pro-business liberal Free Democrats (FDP), and regionalist Free Voters (FW) - comes to a total of 28, over the one-third minority block on constitutional changes. 

  • However, reports claim that FW leader Hubert Aiwanger said over the weekend that "Even if this is complete madness: The CSU can vote in the Bundesrat without us. That's why it's pointless if we continue to oppose it.". An agreement was announced on the evening of 17 March that will see Bavaria vote for the debt brake reform, and alongside all other states that have only the CDU, SPD, and/or Greens in gov't this will ensure the two-thirds majority threshold is cleared. Taggespiegel reports that Minister-President Markus Söder had threatened to bring down Bavaria's coalition and replace the FW with the SPD if the former insisted on opposing the debt brake reform.
  • For the parties supportive of the reforms, the acquiescence of the FW is a major boon that avoids the need for concessions to be made to the parties of the far-left, or the anti-excessive spending FDP.
  • With the Bundesrat set to approve, the only obstacle to the reforms passing remains a larger-than-expected rebellion by CDU/SPD/Green lawmakers in this afternoon's Bundestag vote (expected to start ~0830ET/1230GMT/1330CET). 

Chart 1. Composition of Current Bundesrat, Seats

Keep reading...Show less