According to Reuters, Germany might its skirt strict national spending rules by establishing new ‘independent’ public agencies. These would be able to take on new debt and enable further public investment in the country’s flagging economy.
The creation of new investment agencies would let Germany take advantage of low borrowing costs to spend more on infrastructure and climate protection, over and above current debt limits, three people familiar with talks about the plan told Reuters.
However, once factors such as growth rates have been taken into account, Berlin only has the scope to increase new debt by 5 billion next year.
Limits on how much debt they could take on would instead be governed by the rules of the EU’s Stability and Growth Pact, giving Germany room to boost spending without meeting the two-thirds majority required to change its own debt rules.
The Finance Ministry and the Ministry of Economic Affairs and Energy both declined to comment. However, a Finance Ministry spokeswoman pointed to an earlier statement by a Deputy Finance Minister for parliamentary affairs who observed that Berlin did not think there was a lack of public funds.