March 19, 2020 / 12:06 PM / 9 days ago

Germany to use exception to debt brake, eyes new borrowing - source

BERLIN, March 19 (Reuters) - Germany plans to declare an exception to the debt brake enshrined in the constitution during a meeting on Monday to finance fiscal stimulus measures in the fight against coronavirus, an official with knowledge of the plan said on Thursday.

This means that Berlin will take on new debt this year for the first time since 2013, the official added.

Under the German debt brake rule, the federal government can take on new debt of up to 0.35% of economic output. But it can go beyond that if the country is hit by a natural disaster or “exceptional emergencies” that are beyond the control of the state and significantly affect the state’s financial situation. (Reporting by Michael Nienaber Editing by Alexander Ratz and Michelle Martin)

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