Head of Germany’s SPD sees ‘good starting point’ for reforming debt brake

BERLIN (Reuters) – The leader of Germany’s Social Democratic Party (SPD) sees a “good starting point” for reforming the nation’s spending cap, known as the debt brake, and said that such a move wouldn’t have to wait until the formation of a new government.

Referring to signs of willingness for reform from the centre-right opposition, Lars Klingbeil told the Handelsblatt newspaper: “That’s a good starting point for continuing straight away.”

Opposition leader Friedrich Merz of the conservative Christian Democrats (CDU) has said he could be open to reforming the debt brake, which limits Germany’s public deficit to 0.35% of gross domestic product, in certain circumstances.

Merz has been tipped to succeed the SPD’s Olaf Scholz as chancellor in snap elections set for Feb. 23, with the CDU currently leading in the polls.

“We don’t have to wait until there is a new government in April, May or June, when we don’t even know whether we will have the necessary majorities in the Bundestag (lower house of parliament) with a two-thirds majority,” Klingbeil told the business paper’s podcast in comments published on Friday.

Any reform of the debt brake would require a two-thirds majority because it is enshrined in the country’s constitution.