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Germany Moves to Rein In Future Borrowing

Constitution will be changed to ban excess borrowing: Merkel

By Ambreen Ali,  Newser User

Posted Jan 13, 2009 4:17 PM CST
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(Newser) – As Berlin rolls out a record $65 billion stimulus package, it's also making excessive government borrowing a constitutional crime. The new amendment—which will limit the national deficit to .5% of GDP "in normal economic times"—is a sign of the government's discomfort with its new stimulus, which totals 1.5% of GDP. "This is an extraordinary situation and we must respond with extraordinary measures," Chancellor Angela Merkel tells the Financial Times.

The German chancellor unveiled a $65 billion stimulus package this week, but made it clear the government wants to repay the debt quickly.
The German chancellor unveiled a $65 billion stimulus package this week, but made it clear the government wants to repay the debt quickly.   (AP Photo/Michel Euler)
A broker is seen under the curve of the German stock index DAX at the stock market in Frankfurt. The stimulus is needed for such extraordinary times, the chancellor says.
A broker is seen under the curve of the German stock index DAX at the stock market in Frankfurt. The stimulus is needed for such extraordinary times, the chancellor says.   (AP Photo/Michael Probst)
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This is Europe's biggest stimulus yet
Financial Times (UK)

Plan doesn't boost investor confidence
Forbes

Merkel makes German markets appealing
Financial Times (UK)

World • Money • Politics

 
Germany • budget deficit • bailout • credit market chaos • Chancellor of Germany • financial crisis • fiscal policy

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