Following reports that efforts to reform Germany's debt brake had collapsed, the expert commission appointed to handle the task is mounting a final attempt to salvage the process, according to a newspaper report. The commission has drawn up a concept for a so-called "flexible debt brake," the Handelsblatt reported, citing a statement issued on Thursday.
Inside the commission the concept goes by the name "FinanzpfadPlus" and is designed to ensure that government debt eventually falls back toward 60 percent of economic output.
The conservative Union bloc and the SPD agreed during their coalition negotiations to overhaul the debt brake. Federal Finance Minister Lars Klingbeil (SPD) responded last summer by appointing the expert commission. The 15-member body has been examining a reform since September 2025. The aim is to redesign the rule so that additional investment becomes permanently possible while public finances stay on a solid footing.
In April, the Bild newspaper reported that the commission had failed. The breakdown was attributed to sharply diverging views on the debt brake and on how far its rules might be loosened.
The commission is now proposing a model under which the permitted budget deficit would hinge on several factors, including the overall level of government debt, the rate of economic growth, and debt-reduction targets still to be set. A mathematical formula would translate these inputs into a ceiling for the budget deficit that shifts from year to year. When total debt is high, the state would be allowed to run only a small deficit, according to the details. When debt is low, a larger deficit would be permitted.
The commission agrees, according to the report, that the debt brake in its present form does not deliver stable public finances. For that reason it wants to phase out the exemption that currently shields defence spending from the rule, although members differ on how quickly that should happen. The panel also intends to tighten the oversight of public finances.
The body is additionally proposing fresh transitional arrangements for situations in which the federal government suspends the debt brake during an emergency, the report continued. The experts remain divided on the central question of how high government debt and the budget deficit should be allowed to climb in future.
Union representatives are pushing for firm targets that would steer government debt back toward 60 percent by the middle of the decade, and they want those targets anchored in the constitution. The SPD representatives are resisting that approach and instead want investment carved out from the debt brake altogether. Both camps have so far failed to bridge this fundamental conflict, even as they worked on the new concept, the Handelsblatt reports.
Amending the debt rules enshrined in the Basic Law would be a substantial step in any case, because it requires a two-thirds majority in parliament. The governing parliamentary groups do not command such a majority at present.
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