Prof. Dr. Christoph Gröpl
Lehrstuhl für Staats- und
Verwaltungsrecht
The new German ‘Debt Brake‘
—a constitutional attempt to
restrain state indebtedness
’Debt Brake‘
Israel
public debt: € 54 bn
(≈ $ 78 bn)
population: 7.6 m
≈ € 7,000 per capita
Germany
public debt: € 2,000 bn
(≈ $ 2,908 bn)
population: 82 m
≈ € 24,000 per capita
Prof. Dr. Christoph Gröpl · Debt Brake
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’Debt Brake‘
Hierarchy of Norms
(national level)
Constitution
Parliamentary
Acts
other acts of State
Prof. Dr. Christoph Gröpl · Debt Brake
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’Debt Brake‘
Art. 115 par. 1 Basic Law (version 1969)
[…] Revenue obtained by borrowing shall not
exceed the total of investment expenditures
provided for in the budget…
… exceptions shall be permissible to avert
a disturbance of the overall economic
equilibrium.
FCC: wide range of discretion
for the budgetary legislator
Prof. Dr. Christoph Gröpl · Debt Brake
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’Debt Brake‘
Art. 126 par. 1 TFEU (Lisbon version 2009)


annual deficit limited to 3% GDP
overall debt restrained to 60% GDP
Problem: lack of enforcement
Prof. Dr. Christoph Gröpl · Debt Brake
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’Debt Brake‘
Art. 109 par. 3 Basic Law (version 2009)
The budgets of the Bund and the Länder
shall in principle be balanced without
revenues from credits.
(applicability: 2016 [Bund], 2020 [Länder])
Exceptions:
 deficits in times of downswing to balance
the effects of market developments that
deviate from normal conditions
 unusual emergency situations beyond
governmental control and substantially
harmful to the state’s financial capacity
Prof. Dr. Christoph Gröpl · Debt Brake
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Thank you
for your attention!
Prof. Dr. Christoph Gröpl · Debt Brake
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